Rebuilding Your Credit
Rebuilding your credit is the final step to any successful bankruptcy filing. While some think that filing for bankruptcy will ruin their credit, the truth is that often, individuals who are considering bankruptcy already have damaged credit due to missed payments, defaults, or other financial issues. Filing for bankruptcy can eliminate many of these issues, and give you the chance to rebuild your credit over time. Starting out with a clean slate, there are specific steps you can take in order to see your credit score improve. By taking proactive steps to rebuild your credit from the very beginning, you will see a definite improvement in your credit score as time passes.
The first step to rebuilding your credit can be taken shortly after your bankruptcy is discharged. You will need to obtain copies of your credit report from all three credit bureaus and check to make certain that all debts which were discharged under your bankruptcy are appropriately listed as discharged on your credit report. If you notice any debts that are incorrectly listed, you should notify the credit bureau so that corrective action can be taken. Now is also a good time to make sure that any other debts which were not discharged are also correctly listed. You want to be certain that your timely payments are being recorded properly, so that your credit will improve in time.
The longer it has been since your
LA bankruptcy was filed, the less of a factor it will play when lenders are considering extending credit. For this reason, it's important to avoid opening new lines of credit too soon after your bankruptcy has been discharged. Instead, focus on rebuilding a positive credit history that will reflect positively with regards to your credit score. If you still have a mortgage, pay it on time each month, and the same goes for any other secured debts such as your car payment. Repayment of student loans is also a good option for rebuilding your credit. If none of these applies to you, you may be able to convince your bank to make a small loan to you for the purposes of rebuilding your credit. The trick is not to spend the money you receive from the loan, but instead, use the money to repay the loan at regular intervals over time - just be sure your bank reports these payments to the three credit bureaus.
When you do decide to apply for a credit card, make certain to pick one with a favorable interest rate - read the fine print, and ensure that the card is a good fit for your needs and your financial situation. Keep the balance on the card low, because part of your credit score is based upon your available credit to debt ratio, and maxing out your credit cards lowers your credit score significantly. Aim to keep your balances at 40% or less of the available balance.
Over time, if you follow these steps, your credit will continue to improve. While no one can say exactly how long it will take to improve your credit score, it will take less time if you actively work towards improvement, rather than just waiting for the bankruptcy to be removed from your credit report. Our reputable Los Angeles County Bankruptcy Law Firm is available to answer any questions you may have about rebuilding your credit after bankruptcy. Contact us today and arrange for a free initial case evaluation as soon as possible. Let our team of reliable, experienced
Los Angeles County Bankruptcy Lawyers help you learn about the benefits of bankruptcy, and how you can rebuild your credit to ensure a solid financial future.