The Cassidy Law Firm Blog

Saturday, October 31, 2020

How Do You Rebuild Credit After Filing Bankruptcy?

One pervasive myth surrounding bankruptcy is that your credit will sustain irreparable damage. While your credit will take a hit due to bankruptcy, it is by no means something that you cannot come back from. By taking certain measured steps, you can rebuild your credit over time. A bankruptcy will stay on your credit report for about 7 to 10 years, but the impacts of bankruptcy will lessen as time passes when you are proactive. Here, we discuss several ways you can rebuild your credit after filing bankruptcy.

How Do You Rebuild Credit After Filing Bankruptcy?

The first thing to do as you start your journey back to better credit is to review your credit report. You want to be sure that your credit report accurately displays the details of your bankruptcy. While having a bankruptcy on your credit report can have some negative impacts, it can actually be vastly better than having outstanding and delinquent balances on your credit report. Be sure to check that all outstanding and delinquent balance discharged in bankruptcy are accurately reported as zero.

You also need to be mindful of the fact that bankruptcy may not have discharged all outstanding debt. For example, student loans are not usually discharged in bankruptcy proceedings. As such, you should be aware of your remaining outstanding balances and make timely payments. All active accounts will continue to impact your credit score. Persist in making payments on these accounts to pay them down.

It is also important to get access to new lines of credit after bankruptcy. This can also be, however, one of the most difficult challenges to overcome as bankruptcy will hurt your chances of a lender granting your access to new credit. The good news is that some lenders are actually more willing to approve credit cards o applicants with a bankruptcy filing on their credit report. This is due to the fact that you have to wait 7 years before you are able to file for bankruptcy once again.

Should it prove too difficult to secure a traditional line of credit, consider trying to get a secure credit card or loan. A co-signer might also be a good option. Do what you need to do in order to work towards re-establishing your credit. Once you have been approved for new credit, make sure you are making timely payments and keeping your balances low.

Another thing you can do that will indirectly help your credit is to maintain job consistency. While job-hopping will not impact your credit score, lenders will be wary of someone looking to borrow who has a history of frequent job changes. Retaining a consistent job will make you more appealing to lenders as it shows a level of discipline as well as responsibility.

New Jersey Bankruptcy Attorneys

At The Cassidy Law Firm, we help people get a fresh start through bankruptcy. This fresh start may come with some challenges, such as rebuilding credit, but these challenges are not insurmountable and can be vastly outweighed by the many benefits bankruptcy can offer a person struggling financially. Contact us today.


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