Bankruptcy is a great way to discharge a significant amount of unsecured debt. However, it can also negatively impact your credit score. Remember, your credit rating is what helps you obtain a loan for a new home, car, or apartment. Fortunately, if your credit score was lowered as a result of bankruptcy, there is a path forward.
5 ways to improve your credit score
Here are a few ways you can improve your credit score post-bankruptcy:
- Know your credit rating: First, you should check your credit score. Generally, you want to have a FICO score of mid-700 or above when applying for a loan. If your score is lower than this, lenders may be reluctant to offer you credit.
- Pay on-time: 35% of your credit score is based on your payment history. You can rebuild your credit rating by paying bills on time consistently. One way to accomplish this is to set up auto pay.
- Apply for credit: Once your debt is discharged through Chapter 7, you should apply for a new credit card. You need to start showing lenders that you are financially responsible and that you can pay your bills on time. Start with a secured card to be extra cautious. Make sure they report your payments to the credit bureau.
- Do not close any accounts: A decrease in your credit limit will ultimately lower your score.
- Use credit responsibly: After you obtain your new credit card, remember to use it. By managing debt, you can improve your credit score over the long term.
Our knowledgeable bankruptcy attorneys in Denver can help
Debt can put a great deal of stress on you and your family. With over 30 years’ experience, at Long & Long in Denver, our dedicated bankruptcy lawyers work closely with you to determine the best method for resolving your situation and giving you a hopeful future.