Handling Credit Concerns After Bankruptcy

Bankruptcy Attorney

For many people, the Dayton bankruptcy process can seem intimidating and even scary. One major concern people often have in filing for bankruptcy is their credit. The good news is that bankruptcy does not damage your credit, but missed payments and delinquent accounts do. Get to know a little bit about how your credit score is managed during and after your case to gain the confidence you need in making your financial future the best possible.

Remove and Rebuild

If you are in the position to seek bankruptcy protection, chances are the damage to your credit has already been done. What bankruptcy provides you is a clean slate that is free from negative payment histories and delinquent account standings. When your accounts become resolved they are then reflected in good standing, which is the first step towards repairing your credit. Once your debts have been erased, here is what you need to do to rebuild your credit future:

1. Check Your Credit Report– all too often creditors fail to update your information with the credit reporting bureaus in a timely manner. This means your newly resolved accounts may not be reflected accurately, becoming a roadblock in your credit recovery efforts. File a request with creditors to have them update your information as soon as possible, making sure to keep all documentation you received of your debt discharge from the court.

2. Make A Credit Recovery Plan — having a specific plan towards your credit recovery is the best way to stay on track. Start by examining your current budget and outline how much you can afford to allocate towards a payment on a small line of credit. Shop around for one or two low-limit credit accounts to obtain a manageable balance. A good rule of thumb is to keep your purchase balances to 30 percent or below the total available limit on the account, this ratio is a quick credit booster.

3. Be Purposeful and Patient  — rebuilding credit takes time. It is not a race, but a marathon that requires diligence and effort. Remember that using credit at this stage is for reestablishing your credit and not for convenient spending. You may not get the accounts you want at first, and may even have to wait longer than expected to obtain a secured loan like a house or car, but the wait is well worth it in the end.

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