In our last library article, we discussed how declaring bankruptcy will often have a significant and adverse effect on your credit score – but also how being in debt and missing payments can badly harm your credit history. If you decide to petition for bankruptcy in California, you should know that there are several steps you can take after filing that can help get your credit score back on track quickly:
• Pay all of your bills on time. It’s simple and it works. Keep your balances low and try to make more than minimum payments. Close accounts that you don’t use.
• Get a new credit card and use it wisely. Only make small purchases on your card and be sure to pay off the entire balance each month. If you are unable to get approved for an unsecured card, start with a secured card for the first year or two.
• Make a budget. Making a budget and following it will ensure that you do not find yourself without funds to make monthly payments. This is a smart move even if you declared bankruptcy because of medical bills, divorce, or another life emergency.
• Take out a small loan. Again, you can improve your score by proving that you are now trustworthy and responsible when it comes to lending money. Consider a small loan, such as a car loan, that you are positive you can pay considering your income, other expenses, and even emergency situations.
• Build an emergency fund. Most people with debt issues aren’t irresponsible, they simply weren’t prepared for an emergency. This time, be ready for a death in the family, a job loss, or a medical issue by having a savings account just for such issues.
• Keep an eye on your credit report. Credit reports can have mistakes. Make sure you know which cards you have open, what your credit report is listing, and that all of your accounts are accurate.
If you are smart with your credit and cautious with your money in the years after a bankruptcy, you can repair your damaged credit report significantly in just a few years – and far before the ten years it takes for your bankruptcy to drop off of your credit history officially. To learn more about bankruptcy and your credit score, talk to Chula Vista bankruptcy attorney Kerry Denton today by calling 888-478-0168.