Bankruptcy is a difficult process emotionally, but it can also be devastating to the individual’s credit. While bankruptcy can give necessary relief, it can also tank credit scores and make it difficult to qualify for low interest loans. This is not the end, however. There are ways to build credit even immediately after the bankruptcy resolves.
- Begin or continue to make all financial obligations on time.
Paying bills on time, meeting any debt obligations remaining after the bankruptcy, and paying off credit cards every month builds credit. These acts demonstrate that the relief is working to create financial stability.
- Acquire a secured credit card.
Secured credit cards do not require a certain credit score. Instead, these credit cards require a deposit to the creditor which will be kept if the card goes into default. When applying for a secured credit card, it is best to make sure that the creditor is reporting the card activity to all three major credit reporters: Experian, TransUnion, and Equifax. It is also better if the secured credit card has the ability to transition to an unsecured credit card following a certain period of time.
- Get a credit-builder loan.
A traditional loan requires certain credit scores and is instantly deposited into the petitioner’s account. Credit-builder loans, however, are deposited into the lender’s account, and the petitioner makes steady payments while the lender reports to credit agencies. When the loan is paid in full, the money is given over. While not especially effective for immediate financial needs, credit-builder loans serve primarily to build credit with the added bonus of a delayed nest egg. For those that can afford to use them, credit-builder loans are an excellent way to rebuild credit.
While bankruptcy is a daunting and stressful time, it is not the end financially. Through responsible financial planning and credit building options, petitioners can recover their fiscal reputation.
If you believe you may need to file bankruptcy, you will need an experienced bankruptcy attorney to see you through the complex process. Only one service can find you the best bankruptcy attorney in your area: Attorney at Law.
At AAL, our nationwide network of attorneys and law firms lets us introduce you to the best attorney for you. AAL can pair you with an experienced local attorney who is knowledgeable about your local bankruptcy laws as well as experienced with a proven track record of success.
Don’t wait. Contact AAL today for a free, no obligation consultation and start your journey to financial freedom.