When filing bankruptcy, the main objective is to obtain relief from debt, get back on a firm financial foundation, and repair broken credit. By simply completing a bankruptcy plan successfully, you will often times see an increase in your credit. There are some very methodical things you can do to continue the credit rebuilding process on your own that your bankruptcy attorney will most likely suggest to you.
Among the most important ways to improve your credit rating after bankruptcy, making all your payments, on time is at the top of the list. While a bankruptcy filing will stay on your credit report for up to 10 years, it still can be a better solution to repairing your credit than letting your debt burden grow or enter default. After the completion of a bankruptcy it’s wise to use caution about obtaining new debt as soon as the bankruptcy process is finished.
Managing Your Money
It is important to ensure that you are living up to your budget before taking the next step. When you are ready, a good way to begin rebuilding your credit rating is to find a low to no fee, secured credit card. These cards often involve paying the credit card company a deposit up front, say $200-$500 dollars. This then becomes your credit limit and any purchases made involve a moderate interest rate. Consider this a small fee to have the secured credit card company report to the credit agencies that you are paying on time and as agreed, which will certainly help increase your credit score.
Once your credit score has reached the 600 to 650 range, you may be eligible for an auto loan or line of credit. Make sure you approach these loans with caution and only take out a loan that you are sure you can pay back. It will not be uncommon to have a higher interest rate to balance out the risk for the lending party.
If you follow these steps, you should see a healthy rise in your credit score. A great thing about this plan is that you can avoid credit repair services which often times charge excessive fees for little or no real world results, and you will be learning to deal with your finances on your own. The additional benefit to having a Elk Grove bankruptcy lawyer during the process of filing and fulfilling your bankruptcy obligations is that you will always have someone to turn to for advice after a bankruptcy discharge is obtained.