Rebuilding Your Credit

Most individuals who file for California bankruptcy have significant credit issues even before the bankruptcy filing itself. Once the bankruptcy has been discharged, there is a unique opportunity presented – the chance to start over, with a clean slate, and rebuild the kind of credit that will enhance financial stability and peace of mind. Rebuilding your credit after bankruptcy doesn’t have to be difficult. In fact, if you are diligent and take an active role in your credit management, you can start to rebuild your credit almost immediately after the bankruptcy discharge.

Your first step in rebuilding your credit after a bankruptcy discharge is to make certain that your credit report is accurate and up-to-date. Check with all three credit bureaus – be sure that the debts which were discharged under your California bankruptcy are accurately listed as discharged. If you find any inaccuracies on your credit reports, get them corrected, and get confirmation of any changes to your report. Your next steps will vary depending upon your particular situation. If you have debts which are currently reported to the credit bureaus, you will want to be certain to pay those debts on time, and maintain your good payment history. If you do not have any debts which can be reported favorably, you will need to reestablish a credit account of some kind which will allow you to build a payment history.

Rebuilding your credit won’t happen overnight – it will take months of steady payments in order to see your credit scores improve. However, if you work to maintain responsible credit use, your scores will continually improve as the time after your bankruptcy discharge increases. Specifically:

1.       Avoid maxing out any credit cards or lines of credit. Maxing out your credit cards can cause your credit scores to drop, even if you pay on time.

2.       Keep your balances low. Pay more than the minimum each month in order to make your credit more manageable.

3.       Don’t open up too much credit at once. Applying for several new credit cards at once can lower your credit scores. Pick one or two cards that have reasonable terms and avoid the temptation to open more accounts.

If you have concerns about potential credit issues that are keeping you from considering filing for bankruptcy protection in California, talk to us. We can give you solid, objective legal advice that can help you to make a decision about whether or not bankruptcy is the right solution in your case. Our team of professional, experienced California bankruptcy attorneys has years of experience in dealing with California bankruptcy law and credit issues. Take advantage of our free online California Bankruptcy case evaluation to get the answers you need before making your final decision. Don’t let worries about rebuilding your credit stop you from taking full advantage of the protections that bankruptcy has to offer.