Did you recently file for bankruptcy to experience debt relief? Chapter 7 and Chapter 13 both provide relief for applicants in different ways, but Chapter 7 in particular can help you get a fresh start.
If you have filed for bankruptcy, don’t despair about your low credit score. Your credit is not permanently ruined- there are ways to reestablish your credit after bankruptcy.
Here at Dion R. Hancock, P.A., I not only assist clients with their bankruptcy filing, but I also provide honest and straightforward financial advice about life after bankruptcy. Here are a few helpful tips from a Tampa bankruptcy lawyer about how to rebuild your credit after bankruptcy.
Be sure to open up a new checking and savings account- It is important that you have both accounts open. You can open a checking or savings at any bank or credit union, just be sure to compare rates and bank services to find the best option for you.
Apply for a secured credit card- This type of credit card is perfect for those who have just filed for bankruptcy. Secured credit cards are very similar to debit cards because the bank or credit union is paid in advance for the services, not afterwards. For example, in the beginning you will probably set a $500 limit on the card, but over time you will be able to raise the limit.
Make sure that all your transactions are being sent to the three major credit bureaus. After making purchases with this card for a period of time, you should see it building up your credit score. When even time passes, you should be able to switch to an unsecured credit card with your bank.
Apply for a retail credit card or gas card- After you acquire a secured credit card, you can now see if you are eligible for a gas credit card or a retail store card. If you do use these cards to make transactions, be sure to request that all of your transactions are sent to the main credit companies.
It is important to remember that this is not the time to go on a shopping spree or rack up credit card debt. The point of having these additional credit cards is to give you even more opportunities to prove that you are a responsible consumer by making timely payments.
Try to pay the full balance on your monthly statements- When you receive your credit card statement, it is always best to just pay the full balance rather than leaving a remaining balance. This is especially true for consumers who have poor credit.
The credit bureaus will be looking to see if you are able to pay off your balance in full. With this in mind, you must keep the mindset of not buying more than you can afford to pay at the end of the month.
Request a copy of your credit report- Once a year you are able to request a free credit report from the three credit bureaus: Equifax, Experian, and TransUnion. It is wise to check it every year, this way you can properly monitor your progress and see how your credit has grown.
Don’t be late on paying your bills- Every time that you are late on a payment, keep in mind that you could be accruing a late fee and you could be damaging your credit. That is why it is vital that you mark your payment deadlines on the calendar and always pay our bills on time or even ahead of time. If you are sending the payments by mail it is always smart to give an extra day or two in case the mail gets delayed.
Check your credit report to make sure that it is correct- After you request a copy of your credit report be sure to look it over carefully to make sure all the information is correct. There is incorrect information on those credit reports at times, but there is a reporting agency that you can call to dispute any errors. You should always dispute these errors because every little thing can help build your credit score.
Create a strict budge and follow it- In order to ensure that your finances are in order, you should sit down and make a budget for all the essential monthly bills. Having a budget can also help you make sure that you have enough money for the important things including rent, mortgage, food, cell phone, gas, insurance and medical bills.
Use leftover money to put in savings or to build up your credit- After you pay all over your monthly bills, you can put a portion of it savings and use the remainder to make purchases that will further build your credit.
It is always important to have a little money in savings in case of emergency like car maintenance/repairs or sudden unemployment. Try to make sure that you always have around $1,000 saved up for emergency expenses.
If you have more questions about rebuilding your credit after bankruptcy, please do not hesitate to speak with a Tampa bankruptcy lawyer here at Dion R. Hancock, P.A. Call today for a free consultation at (813) 223-4821.