Contrary to popular belief, filing for bankruptcy does not damage your credit. Missed payments, high balances and delinquent account standings damage your credit. While your bankruptcy case draws to a close you will have credit repair to do, but the good news is that bankruptcy gave you a clean slate to rewrite your history.
Any experienced Dayton bankruptcy lawyer will tell you that the first place to start your financial future is with your credit. After your debts are discharged you have a fresh start to establish a better credit history. Here is how:
Check your credit report. It can take weeks or more before your creditor to report your new account information to the credit bureaus. Make sure your information is up to date.
Don’t close out all of your accounts. It may be tempting to close out accounts with a zero balance, but leaving a few of them open and empty is actually more beneficial to your credit score.
Apply for a small line credit. Even if you have existing lines of credit that are open and empty, obtaining new credit shows confidence to other creditors. Stay away from high limits and favor low interest rates or fees.
Make planned purchases. Plan a small balance to carry on one or two lines of credit. Keep the balance below 40% of the limit and make timely payments. Be sure that your purchases do not result in a monthly payment you cannot support.
Obtain a secured line of credit. This is usually a step best served after a few months of responsible purchasing and payments histories. Don’t be tempted into buying a high dollar car, rather obtain a personal loan or financed purchase that is within your budget.