After filing for bankruptcy, your credit rating will plummet to an absolute low. Although your finances will most probably improve, you’ll also have to deal with the consequences, which will manifest in anything related to credit purchases.
The fact that you filed for bankruptcy will appear on your credit report for the next 10 years. Creditors look at your credit report every time you apply for any loan to decide whether or not they should approve payment of your loan. Seeing bankruptcy on your credit report will of course deter creditors since their money will be less secure to spend. This doesn’t need to be the case however…
After filing for bankruptcy with an approved Houston bankruptcy lawyer (there are many in your location, e.g. a Baytown bankruptcy lawyer), you can start off by reviewing your credit report to understand what you need to do to reach a stable credit level. You should be able to obtain a free copy of your credit report to review individually and determine the amount you will need to spend on credit reduction.
Obviously you should start paying off your debt, but don’t go spending large amounts all at once. Make sure you have enough money to pay off future incoming bills on time (late payment looks terrible on your credit report). If you start spending large amounts on paying off your debt to get it out of the way, you might end up with scarce savings, which would mean more loans, which you are trying to avoid. Pay a reasonable amount frequently according to a budget.
Be cautious when applying for credit, and apply for a credit card after your bankruptcy has been settled which you will use sparingly. A few years after the case you can apply for a loan if you are positive you’ll be able to pay it off successfully and on a monthly basis. Once you start paying your debt on time and thus improving your credit score, you will gain more trust from creditors and your steep interest rate will decrease with your bad credit rating. Just be wary of going over your credit limit.
There are many “services” out there to improve your credit rating, especially online-based “services.” You should approach these offers with discretion and have the willpower to look the other way even in your trying situation. These offers are most frequently scams, and should be avoided like the plague. True credit maintenance takes severe patience and will to cut back on spending and slowly earn the trust of respected creditors.
Know that you should focus on all your sources of credit. Closing a credit account is not beneficial when repairing your credit rating, since it decreases your credit score when you limit the amount of credit available to you. Keep your accounts open if possible, or simply get rid of the means of creating credit (your account credit card). With a respected Houston bankruptcy lawyer (e.g. a Baytown bankruptcy lawyer), you can determine your unique credit situation and know where to develop.
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