If you recently went through the Chapter 7 or Chapter 13 bankruptcy process, you likely have been left with many questions about what your life will be like now. Many people worry about their credit scores and whether they will ever be able to buy houses or motor vehicles. One of the most common things our clients wonder about is what steps they can take to improve their credit score. The following will review a few helpful steps you can take after a bankruptcy discharge to make the most of your “fresh start” and take control of your credit.
Keep a Close Eye on Your Three Major Credit Bureau Reports
After spending an intensive period addressing the debts you owe, you likely do not want to spend any more time monitoring your credit. Despite this, it is important to closely monitor your credit reports from the three major credit reporting agencies, which are Equifax, Experian, and TransUnion. These reports will keep you updated about whether you have any new negative credit marks. By routinely reviewing these reports, you can also catch any errors that may arise in your credit history.
Consider Opening a Secured Credit Card
Some people believe it is impossible to obtain a credit card after bankruptcy. In reality, many people end up utilizing secured credit cards following a bankruptcy discharge. Secured credit cards involve a person paying a security deposit to a financial institution before using the card. All payments made on the credit card are then reported as credit. These cards can be one of the most powerful ways for a person to begin rebuilding a credit score. Some people even discover that it is possible to begin using an unsecured credit card after several months of using a secured card.
Remember to Pay Off Your Credit
If you do decide to obtain a credit card, it is critical to pay off your balance at the end of each month. This way you can demonstrate to the credit bureaus that you can responsibly take care of your financial affairs. To make sure that you can pay off your balances, keep these amounts low. You should always do your best to pay off more than the minimum monthly payment amount.
Create and Follow a Budget
It is not just enough to create a reasonable monthly living budget, you should also do your best to stay within this amount. This way, you can avoid creating any debts that you will be unable to handle. If you need to make cuts to create a lower estimated budget, there are various ways to reduce costs, like taking the bus to work or bringing your lunch to the office rather than going out to eat.
Contact an Experienced Bankruptcy Attorney Today
Navigating the bankruptcy process can be challenging. Many people find it difficult to return to how life was before the bankruptcy filing. If you need the assistance of a bankruptcy attorney during this difficult time, contact the Adam Law Group today.