Bankruptcy Can Fix Bad Credit
Many people avoid filing bankruptcy because they are afraid it will ruin their credit. In reality, if you are behind on your bills and significantly in debt, your credit score may have nowhere to go but up. Filing bankruptcy can actually be a way to improve your credit.
After you obtain a discharge of debt by filing bankruptcy, you will have significantly less debt than you had before. If you are able to keep up with your bills after bankruptcy, your credit will begin to improve — perhaps faster than you think.
At the Maida Law Firm, our lawyers offer a free initial consultation to the effect of bankruptcy on your credit. With offices in Beaumont and Houston, we serve people throughout southeast Texas and the Texas Gulf Coast.
How Do I Rebuild My Credit After Bankruptcy?
There are three main credit reporting agencies: Equifax, Experian and TransUnion. Each of these agencies will assign you a credit score based on factors such as your credit history, whether you make payments each month on credit card balances and loans, and how much of your available credit you are using.
Your credit history will go to zero after you file bankruptcy. For this reason, it's important to obtain a new credit card right away so you can start rebuilding your credit history. You may need to get a secured credit card initially.
Once you have a credit card, stay current on your payments. If you have a car loan or mortgage, you need to stay current on those payments as well for your credit to improve.
You should be careful how much of your available credit you use. Ideally, you should pay off credit balances at the end of each month. Don't take out multiple credit cards and carry a balance on each. You may end up in significant debt again.
If you follow these three steps, you should be able to rebuild your credit in one to two years. While your bankruptcy filing will remain on your credit report for 10 years, bankruptcy does not have the stigma it once had.
Contact Our Beaumont and Houston Credit Repair Lawyers
For more information about rebuilding your credit after bankruptcy, call 409-291-5117 to schedule an attorney consultation at our Beaumont office or 713-987-3910 to schedule a consultation at our Houston office.
