How can I restore my credit after bankruptcy?
Consumers in Florida can rebuild their credit after a bankruptcy by taking active steps to obtain an use new credit responsibly, paving the way for a positive financial future.
Consumers in South Florida who are struggling to manage a large amount of debt may sometimes feel afraid about considering bankruptcy because they believe that they will never be able to get credit again if they file for bankruptcy. This is not true, and one of the most common bankruptcy myths. In fact, bankruptcy can be a stepping stone to better credit in the future if people take the right steps after completing their bankruptcy plan.
Credit Restoration Starts with a Good Evaluation.
Bankrate recommends that people fresh out of bankruptcy make it a point to carefully review their credit reports. This exercise often reveals some errors. If this happens, consumers must take steps to get errors removed from their credit reports and have them corrected. From this point forward, regular monitoring of one’s credit report will be important. This allows people to keep a good eye on their progress and act promptly if more errors show up.
The Bankruptcy Discharge and Its Affect on Credit Scores.
As soon as a consumer receives their bankruptcy discharge, they may see a jump in their credit score. This is because part of what credit bureaus evaluate when determining credit scores is the amount of debt a person owes relative to their income. This is commonly referred to as the debt-to-income ratio. Once a bankruptcy discharge has been received, the debt-to-income ratio improves because the debt has been eliminated.
Types of Credit for People Fresh out of Bankruptcy.
NerdWallet explains that a secured credit card or a secured personal loan may provide a good path back to re-establishing credit after bankruptcy. If a consumer uses a secured card responsibly, charging just a little bit each month and paying it off in full every month, they may well be able to qualify for an unsecured card in a relatively short amount of time.
An unsecured card might come with a high interest rate but a person who just completed bankruptcy should not plan to carry a balance so this should be a non-issue. Again, regular use and full payment on time every month is the best way to improve your credit and qualify for better terms.
An auto loan may be another avenue to re-establishing credit after a bankruptcy. Consumers should be prepared to ensure they can make all payments on time and research the best loan terms available before taking on the loan obligation.
As a person uses their newly established credit and shows that they can make payments with no late payments or other problems, their credit score will continue to improve. Eventually, even a mortgage may be within their reach.
Experienced Legal Counsel is Important.
With so many credit repair schemes out there, it is important for consumers to work with and experienced and qualified attorney who handles these types of issues day in and day out in South Florida. To schedule a free initial consultation at our Miami office, contact us through our convenient online form or call 305-285-9100. We can help you find out how the tools and protections of bankruptcy can help you build a sound financial tomorrow and put you in position to restore your credit. The consultation is FREE, the relief is real.