Rebuilding Your Credit After Bankruptcy

Filing bankruptcy and going through the discharge process can be an exhausting process. What can be even more daunting is thinking about your credit after bankruptcy. Contrary to popular belief, filing for bankruptcy is not a one-way ticket to financial ruin for the rest of your life. Instead, life after bankruptcy can be extremely rewarding – but only for those who plan properly and commit themselves to not wasting the “fresh start” that Bankruptcy offers.

Steps You Can Take to Speed Up Your Recovery After Filing Bankruptcy in Illinois

Save Money

Seems like an obvious choice, but it cannot be reiterated enough how important this step is. While planning out a budget you will stick to, make sure to factor in savings. Make sure you have a set amount of money put aside each month for your savings account. This is also a nice way to build up a nice nest egg, which can be used for retirement or to cover unforeseeable financial expenditures in the future. Finally, this will show lenders that you have become more financially responsible by being capable of saving money, and not just spending it.

Pay Your Bills On Time

In order to show future lenders that you are becoming more responsible in your financial matters, you will need to pay your bills on time. Falling back to old habits is easy, but you must overcome those old ways in order to get new credit down the road. Future Creditors want to see that you have learned from your past mistakes. Paying your bills on time, demonstrates that you’re in control of your financial life and are able to spend within your means. Paying your bills on time, will eventually have Creditors consider you as a desirable credit risk worth taking.

Choose The Right Credit Card To Rebuild Your Credit After Bankruptcy

It’s unlikely that you will be able to obtain an unsecured credit card right after bankruptcy. Experts agree that another way to rebuild your credit is by obtaining a secured credit card. A secured credit card, unlike an unsecured credit card, requires you to make a deposit upfront before you are issued the card. The great benefit of this is that your new credit activity will be reported to the credit bureaus and your new credit history will start building up. Eventually, as long as you pay your bills on time and show the bank you are no longer a credit risk, your secured credit card can be converted into an unsecured one.

**A few warnings and things to keep in mind about secured credit cards:

• Always inquire if they report your payment history to the credit bureaus
• Stay away from those that charge high fees
• Don’t call those that ask you to call a 900 number (you’ll be charged for the call)

Schedule a Free Consultation with our Bankruptcy Attorneys

Rebuilding your credit after bankruptcy will take some work. There are more ways to rebuild your credit after Bankruptcy. Call our Chicagoland Bankruptcy attorneys for a free consultation.