There are a number of positive and potentially negative side effects of filing for bankruptcy. Experienced Orange County bankruptcy lawyers know that having your debt eliminated can be a big relief, but declaring bankruptcy will have an adverse impact on your credit score. This means that you may struggle to obtain a credit card, a car loan, a rental agreement, a student loan, or a mortgage.
When you file for bankruptcy, your credit score will take an immediate hit. Also, your bankruptcy may stay on your credit report for up to 10 years. Here are a few steps you can take to start raising your score:
- Carefully review your credit report. Look for errors and inconsistencies. Some issues may be easy to clear up.
- Pay your bills on time. A significant portion of your credit score is your payment history. If you pay your bills on time, your score will go up. Consider setting up reminders on your calendar or creating an automatic payment schedule to ensure that you are never late.
- Apply for a credit card. It is not advisable to get back in debt by securing a number of credit cards. Instead, start with one secured card. Use it sparingly and pay it off in full each month. Carrying balances on your card will not help you build up your score, but paying off your card will.
- Consider a loan you can afford. A couple of years after bankruptcy when your finances are manageable, it may be advisable to get a loan that you can pay off relatively quickly.
- Keep records. Be aware of how much you spend and what your credit card limits are. If you had to file for bankruptcy because you spent more than you can afford, learn from those mistakes.
- Keep your accounts open. If you have any credit cards left after filing for bankruptcy, keep those cards open. Having more credit available to you will result in a higher credit rating.
Last but not least, don’t be afraid to ask for help. Please contact a skilled and knowledgeable bankruptcy attorney at McFarlin LLP who can guide you through the proceedings and help you get your finances back on track. Call us at (888) 728-0044 or contact us online by visiting /contact/.