Rebuilding credit following bankruptcy

People who have filed for bankruptcy often begin looking for ways to rebuild their credit score and improve their financial standing.

People who have filed for bankruptcy are not alone. In 2016, the U.S. Courts reported 819,159 people claimed bankruptcy. People in Florida and across the country who struggle with overwhelming medical expenses, credit card debt, mortgage and other expenses may find financial relief through bankruptcy. Once a bankruptcy is discharged, the debtor may feel free from the financial burden. Yet, even though they may be clear of existing debt, people who have filed for bankruptcy are often left with a tainted credit score.

Rebuilding a credit score following bankruptcy is essential, as the negative mark on a credit report may make it difficult to be approved for loans or buy a house in the future. There are several ways that people can increase their credit score and improve their credit report.

Get another credit card?

While credit cards are often a contributing factor that leads people to declare bankruptcy in the first place, it may be a tool used to help people rebuild their credit following a discharge. The key is to get the right type of credit card and to use it wisely. People should use the card to make purchases, yet always pay off their balances on the card. Avoid carrying a balance on the card, as this can lead to accumulated interest and additional fees.

Financial experts warn people about the dangers of subprime credit cards. These agencies often approve those who have poor credit. However, they may charge extremely high interest rates, fees and annual rates to people who are approved. Although subprime cards market to people who are trying to rebuild their credit, they are often misleading and may lead to a reoccurrence of credit card debt.

Credit report check

People who are trying to rebuild their credit should obtain a copy of their credit report from reporting agencies. It is crucial to ensure that everything is accurate and there are no errors on the report. Checking it often will help to make sure that erroneous postings does not contribute to keeping the credit score down.

Get your legal questions answered

Whether you are in the process of filing for bankruptcy or are simply considering how it would benefit your situation, you may want to speak to an attorney who has a thorough knowledge of the bankruptcy process. Bankruptcy is not ideal for everyone. By speaking to a lawyer about your situation, you may be able to choose the best route to relieve your financial burdens.