How to Rebuild Credit After Filing Bankruptcy
Credit Score Repair
Oftentimes, people who are behind on mortgage payments, car payments, credit cards or other credit obligations worry about the effect filing for bankruptcy will have on their credit score. However, in most cases, an individual seeking advice regarding filing bankruptcy already has significant negative information weighing down their credit score. Therefore, filing bankruptcy will not significantly reduce your score in the future, and will give you the opportunity to begin rebuilding your credit score by discharging debts, as well as stopping creditors and foreclosure.
Lasting Solutions Tailored to Your Needs
Boudreaux Law Firm, has been working as a bankruptcy law firm for more than 20 Years , and we bring this experience to bear on every case we take on. We can help answer your questions about how bankruptcy can help you and the best steps to take afterwards. From our law firm in Augusta and Evans, we serve clients throughout Eastern Georgia in many bankruptcy practice areas. If you are considering bankruptcy, contact us today for one of our experienced Augusta bankruptcy attorneys.
Start Over the Right Way and Rebuild Credit
After filing bankruptcy, you can take several steps to begin rebuilding your credit score. Here are some of the main ways to improve your credit score:
- Develop a clean and current payment history on any loan obligations that remain after filing bankruptcy such as house payments, car payments or student loan payments. This is generally the fastest way to rebuild a credit score because credit companies tend to weigh current payment histories more heavily than the histories on revolving credit obligations such as credit cards.
- If you do not maintain a house payment, car payment, student loan payment or other fixed loan obligations, obtain an unsecured credit card with Visa or MasterCard. Only charge a small amount (such as a tank of gas or weekly groceries) and pay the bill off in full at the end of the month. If you can’t obtain a regular unsecured credit card, then apply for a secured credit card.
- Develop a financial relationship with local banks and credit unions. You likely can negotiate with a bank or credit union to purchase a “Certificate of Deposit,” then borrow the amount of the Certificate of Deposit through a loan secured by the certificate. This loan will be reported to credit reporting agencies as a fixed repayment loan obligation, and will assist rebuilding credit faster than either a secured or unsecured credit card. The cost for obtaining this credit is usually minimal, as there is normally only a small difference between the interest that must be paid on the loan verses the interest that is paid on the certificate of deposit.
- Carefully review your credit report to clear up any incorrect information and dispute any inaccurate information. As part of the bankruptcy filing process, we always pull a full credit report on each client to make sure all debts are properly listed in the bankruptcy schedules. Negative payment history and information that is more than seven years old, including lawsuits, judgments, tax liens, accounts sent to collections and overdue child support should no longer appear on a credit report.
Although a bankruptcy filing is reported on an individual’s credit report for 10 years, it usually takes only two to three years of developing a stable payment history on credit obligations to rebuild a credit score for a person to qualify for conforming loans for automobiles and homes. Each case must be analyzed individually, and is based upon additional factors such as the individual’s work history, income and other household expense ratios.
Contact Our Experienced Bankruptcy Lawyers in Augusta, Georgia
For more information, contact one of our highly skilled bankruptcy attorneys in Augusta, Georgia. We will examine your individual case and explain to you whether bankruptcy is right for you. Contact us today.
Eastern Georgia Bankruptcy and Family Law Attorney
If you need help navigating difficult issues of a divorce, contact the Boudreaux Law Firm today to meet with one of our experienced Augusta attorneys. We offer free initial consultations for certain situations and competitive rates in family law cases. When you schedule an appointment with our firm, you will meet with an attorney, not a paralegal or secretary, to discuss all of your legal options.