When making the decision to file bankruptcy, you need to be sure that it is the best option for your financial circumstances. Working closely with a qualified bankruptcy attorney helps ensure you get the results you deserve by lowering or eliminating your debt.
In addition, having a Dallas bankruptcy attorney involved in your case helps assure that the long-term consequences of declaring bankruptcy are minimal and that you next financial steps are in the right direction. After declaring bankruptcy, it is important to take the necessary steps to rebuild your finances and credit score to realize continued success. Here are three tips on how to build your credit after declaring bankruptcy:
- Don’t close accounts after filing for bankruptcy. It may seem like a great time to swear off all credit cards, but closing accounts will decrease the amount of credit you have available, and will actually lower your credit score. Keep lines of credit open, but if you are not in a financial position to use the cards yet, cut them up to avoid temptation.
- Use secured credit cards to help build credit post-bankruptcy. Be sure the card reports to the national credit bureaus so that your on-time payments can go toward improving your credit score. Keep charges low and make payments on time and soon your credit score will begin to improve.
- Take out a loan a year or two after filing for bankruptcy, even though the interest rates might still be high. A small loan that you can pay off successfully will help get you lower rates in the future. Do not rush to take out a loan before you can pay it off; only take out what you can reasonably repay to improve your credit.
Re-establishing credit after declaring bankruptcy does not have to feel impossible. With a few good financial practices and the help of a bankruptcy attorney, you can use your bankruptcy as a fresh start to re-build your credit and improve your economic future.