Credit Restoration

Credit Restoration After Bankruptcy

Our Chicago Bankruptcy Lawyer Can Help Increase Your Credit Score

Are you worried about restoring your credit after bankruptcy? At Smith Ortiz, P.C., we can help. Most people who file for bankruptcy are already suffering the consequences of having a low credit score due to late payments, charge-offs or other damaging information on your credit report. After you file for bankruptcy you have a real opportunity to get your credit back in shape, as you no longer owe the majority of the bills that were showing on your credit report.

Credit restoration can involve the following:

  • Medical bills
  • Credit card bills
  • Unpaid utility bills
  • Other unsecured consumer debt

The Steps to Restoring Your Credit

Once your bankruptcy is completed, you can turn the situation around through a strategy that builds your credit back up. Although your credit score will be lower after filing for bankruptcy, it was likely already in the danger zone, and with the right strategy you can be back in shape far more quickly than expected. Bankruptcy can show on your credit report for up to 10 years, but most creditors will be looking at your more recent financial dealings rather than holding you accountable for bankruptcy for the entire 10 years. In fact, a foreclosure will often have longer-term implications than filing for bankruptcy.

The process of restoring credit involves these simple steps:

  • Ensure that your credit report is accurate, and shows the discharged debt (the discharge of debt changes your debt ratio, an important point in a credit score). Report any inaccuracies to credit agencies.
  • Make a monthly budget of your spending and follow it carefully. Also, try to make a monthly savings goal as well and stick to it so you can build a financial safety net.
  • Make all of your payments on time so that no late payments are listed on your credit report after your bankruptcy is complete, so that all reports going forward are positive.
  • Get a secured credit card and pay it off every month. This helps you to build up a positive credit history and improves your score over time. Shop around for the best deal; usually ones that don't require a big upfront fee or monthly fees.
  • Never buy anything on credit that you can't afford, or will make your budget too tight. There are always unexpected expenses that pop up and this could be dangerous. Making payments on time and in full is a critical part of restoring your credit.
  • If you have not paid off your student loans, do so because these are very rarely discharged in a bankruptcy.
  • Set up an automatic payment plan so that your bills are deducted from your account so you are never late. Most companies will allow you to choose the date of payment, and you can arrange this based upon when your paycheck arrives in your bank account.

With an experienced bankruptcy lawyer on your side, you don't have to worry about the 10 years that the bankruptcy will show on your credit report. Literally millions of people have filed for bankruptcy since 2008. Banks and other lenders make decisions based upon current risk. If you show a positive record of paying on time, an auto loan company is likely to extend you credit, although you may pay a higher interest rate. After paying for a year on time, you can seek to refinance your car through another lender that can provide a much lower interest rate. Get interested in your financial health and you can turn the situation around quickly, and soon enough you will find yourself back in good shape with regard to your credit report.

Need help with restoring your credit after bankruptcy? Call our firm for information and assistance in all debt relief matters from an experienced bankruptcy attorney in Chicago.

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