Rebuilding credit after bankruptcy doesn’t have to wait seven or ten years until the bankruptcy is no longer on a credit history (seven years for Chapter 13, ten years for Chapter 7). Bankruptcy petitioners may begin improving credit scores shortly after the bankruptcy process is complete.
Moving on from Bankruptcy
Even when bankruptcy occurs because of overuse of credit, that doesn’t mean you can’t make positive changes and a start fresh. In fact, starting fresh is one of the purposes of filing for bankruptcy in the first place. Rebuilding credit after bankruptcy is an important first step to gaining financial control and improving a credit score after bankruptcy.
Rebuilding credit could create new options for responsible borrowing – such as home or car loans, unsecured credit cards, and more. Your credit score may even be checked if applying for a job, buying insurance, renting a home, and even when renting a car. Reestablishing yourself financially is, clearly, an important part of the post-bankruptcy process.
If you want to re-establish your credit score but are unsure of how to do so or want to learn about responsible borrowing and spending, you may want to seek out financial counseling. Some types of financial counseling are available for a low cost or even for free, and can help give you more confidence surrounding money and credit use.
Just as important as improving credit scores after bankruptcy is avoiding bankruptcy scams or false promises to restore credit in a short period of time – and the two may go hand-in-hand. Create a strategy, build a budget, and find ways to save money in the period following bankruptcy. With time and patience, you can rebuild your credit after bankruptcy and may find yourself in a better financial position.