Credit allows individuals to borrow money from banks, lenders, credit card companies, etc. so they have access to funds when they need them. Credit allows individuals to buy cars, homes, and rent property. Establishing good credit and maintaining a high score is important as that score will determine whether lenders, companies, or banks will want to loan an individual the money they are looking to borrow.
While maintaining a high credit score is important to do, it isn’t always realistic, especially when an individual is facing a financial hardship and can no longer manage their debt. Credit can be even more difficult to maintain when a person has reached a point where they have decided to file for bankruptcy. Although bankruptcy can take a hard hit on a credit score, it doesn’t mean there aren’t methods that cannot be followed to help rebuild a person’s credit.
SunTrust Bank uncovered a few of these methods after speaking with Dara Duguay, who is an author of several books that cover personal finance. Here are a few of the methods that were shared.
- An individual who filed for bankruptcy should first review their credit report.
If the credit report contains any discrepancies, they should be addressed. If there is still debt that was not wiped off after bankruptcy, the individual can discuss getting that debt settled with the creditor. It is worth noting that when a person reviews their credit report after going through the bankruptcy proceedings, they will likely see it on their report for 10 years if it was a Chapter 7 bankruptcy or seven years if they filed for Chapter 13 bankruptcy.
- Make sure all bills are paid on time.
A credit score can be raised when bills are paid on time. In order to do this, Duguay recommends that an individual create a realistic budget to ensure the funds will be available when it comes time to pay them.
- Consider getting a credit card that can be easily managed.
Although many individuals who just completed the bankruptcy proceedings may not wish to get another credit card, purchases made on a debit card are not reported to the credit bureaus which means they won’t help rebuild a credit score. Therefore, they might consider getting a gas credit card or even a secured credit card to help raise their credit score.
- Seek help from family and friends.
If an individual has close friends or family members who have good credit, they can discuss with them whether they would be willing to add them as an authorized user onto one of their accounts. Once added, “the credit use [will be] reported in both their name and the primary account holder’s name.”
Still on the fence about filing for bankruptcy?
If an individual is concerned about how bankruptcy will affect certain aspects of their life (e.g. their credit score), they should consult with a Tulsa, OK bankruptcy lawyer who can help them make an informed decision as to whether they should file. The lawyers at The Henson Law Firm, PLLC are available to help anyone interested in filing for bankruptcy understand the process and how it will impact certain areas of their life.
The Henson Law Firm, PLLC is located at:
601 S. Boulder, Suite 600
Tulsa, OK 74119
*We are a debt relief law firm in Tulsa, Oklahoma.
*We help people file for bankruptcy relief under the Bankruptcy Code.