How Can I Rebuild My Credit After Bankruptcy?

29 May How Can I Rebuild My Credit After Bankruptcy?

I have always referred to bankruptcy as a tool in the toolbox. In other words, bankruptcy is but one step toward fixing your financial troubles. You must also think in terms of life after bankruptcy, and rebuilding your credit will help to stabilize your financial future. However, attorney Justin Harelik notes in his recent article on Bankrate.com that, by the time the bankruptcy is completed, “debtors are so fed up with credit and debt issues that they wait forever to re-establish their credit.”

Don’t wait! Start rebuilding your credit now! Here’s how:

The first thing to do is pull your credit report. This BLN article by Eugene S. Melchionne shows you how to pull your own credit report, and this BLN article Jay Fleischman teaches you what to do about inaccuracies on your report. Reviewing your credit report and disputing inaccuracies can help increase your credit score.

The next step to reestablishing credit is get one or two, credit card(s), and use them responsibly. Make minimal charges and pay off the balance in full every month. Even if you have to pay a security deposit for a card, it will help you establish a pattern of fiscal responsibility. The more you do this, the higher your FICO score will rise. Harelik suggests requesting limit increases every six months on the card(s). Since an increase in your credit limit is a sign that your bank trusts you to repay the debt, your credit score will rise even further.

Remember, bankruptcy doesn’t signify the end of your credit. Rather, it is the first step to rebuilding poor credit.

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Chip Parker is the managing partner of Parker & DuFresne, P.A., where he represents Northeast Florida businesses and consumers facing bankruptcy, and homeowners facing foreclosure. His firm files more homeowners in the Mortgage Modification Mediation Program than any other law firm in Northeast Florida. Parker is the recipient of Jacksonville Area Legal Aid's prestigious Award for Outstanding Pro Bono Service. Mr. Parker is an active member of the National Association of Consumer Bankruptcy Attorneys and National Association of Consumer Advocates.
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