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If you were among one of the 936,795 people who filed for bankruptcy last year, you may be wondering how you can repair your credit. This is a common question among my clients at Khan Law, and I have successfully helped people in your situation. Here are some of the most helpful tips to increase the score on your credit report so that you can get back on track to living the life you were meant to lead.
Helpful Tips to Repair Your Credit after Filing Chapter 7 or Chapter 13 Bankruptcy
- Continue to make timely payments for newly acquired debts, the debts that were not included in the bankruptcy, or the ones added to a payment plan for your Chapter 13 bankruptcy. Pay by the due date and in full each month.
- Keep low balances on credit cards. A good rule of thumb is to maintain a balance that is within 25% of the credit limit. So if you have a credit card with a $1000 limit, keep the balance no higher than $250.
- Apply for secured credit cards. You will give the credit card company a lump sum of money equal to the amount of your credit card limit to keep as collateral. You will pay fees for this card, but it will be a start to re-establishing your credit.
- Apply for store credit cards. These cards are easier to obtain than other credit cards but often carry higher interests. So use sparingly to avoid going back into unmanageable debt.
- Save for a down payment for a car loan. Car loans are much easier to get than other loans, especially if you put down a large down payment. So save for the down payment and apply for the loan within six months of completing your bankruptcy.
- Be wary of credit card offers. Some credit card companies intentionally solicit people who have just filed for bankruptcy because they know they cannot file again for several years. These companies entice you with cards that have high interest rates, minimum payments and fees.
- Keep your oldest accounts active as your credit score is affected by your credit history. Maintaining a good payment history on your oldest accounts will help improve your credit.
Khan Law can help Decide if Bankruptcy is the Right Option for You
No one sets out to file for bankruptcy, but the truth is, sometimes we are faced with a Life challenge where our income decreases but our debts still need to be paid. If you are faced with a situation where your debts are higher than your ability to pay, please contact Alia Khan with Khan Law. I will sit down with you and discuss your situation in a confidential setting. I offer complimentary consultations and can give you an idea of a solution that will relieve you of the stress, headaches, and anxiety you are experiencing due to insurmountable debt.