Can your credit survive bankruptcy?

 Posted on February 08, 2021 in Chapter 13 Bankruptcy

One of the benefits of filing for Chapter 13 bankruptcy is that you can repay your debt over the course of three to five years. However, during this time, your bankruptcy will be on your credit report and this can lower your credit score.

There are several steps you can take to repair your credit.

Consider a credit card

According to Nerd Wallet, bankruptcy may keep you from qualifying for some credit cards. However, there are still options available to you. You may get a secured credit card. In this situation, you would pay a deposit upfront, and this deposit would become your credit limit. Additionally, you may ask one of your family members to list you as an authorized user on one of their credit cards. These options are temporary measures that allow you to show lenders that you are recovering from your bankruptcy.

Monitor your credit

As you rebuild your credit, you want to keep an eye on it. Do you know what your credit score is? Watch this score every month on your credit card statements if the company includes it. Is this score going up or down? What factors are affecting this score? These questions can help you determine what you might be able to do to raise your credit score.

Additionally, you should read your credit reports. Do these reports contain all of your accounts? Is all the information correct? If you notice inaccurate information, reach out to credit bureaus so they can make the necessary corrections. Inaccuracies on these reports affect your credit score. If you take the time to go over these reports in detail, you can make sure your credit score reflects your current situation.

These steps to rebuild your credit after bankruptcy are worth the effort. If you use all the tools available to you, you can bounce back from bankruptcy and be better off than before it.