How To Improve Your Credit Score After Declaring Bankruptcy
There are several strategies those who declare bankruptcy should use to rebuild their credit after the discharge process. After filing bankruptcy in Connecticut, this action remains on the credit report of filers, and it can stay there for up to a decade. Although the impact of filing bankruptcy will lessen over time, filers may be anxious to boost their credit score after completing the filing process so they can move on financially.
While establishing credit following bankruptcy does take time, there are several strategies filers can use to speed up the process.
Carefully examine credit reports
Once the bankruptcy process is complete, filers should carefully monitor their credit score and credit reports. On a regular basis, consumers should obtain a copy of their credit reports from Equifax, Experian and TransUnion, which are the three major credit reporting institutions. Those who filed bankruptcy should watch out for errors relating to where they work, their personal contact information and their residency information.
Open a secured credit card
After bankruptcy, filers should open up a secured credit card as soon as possible. There is no special process required to obtain a secured credit card, and filers can simply go to their bank to obtain one of these cards. After putting down a deposit on a secured credit card, the bank will provide a credit line worth anywhere from 50 to 100 percent of the deposit amount.
Those who obtain a secured credit card should remember that many of these cards come with an annual fee. Additionally, the rates on unsecured credit cards are higher than those on secured ones, so those with one of these cards can expect to pay rates as high as 23 percent.
Purchasing a car or a home
After bankruptcy, the timeframe required to purchase a home or a car varies by lender and the type of bankruptcy filed. For example, those who file Chapter 7 bankruptcy may be able to purchase a new car shortly after filing. Comparatively, those who file Chapter 13 bankruptcy may be required to get the permission of the trustee to purchase a new car if their repayment plan is still in effect. Those who have yet to fully repair their credit following bankruptcy should expect to pay interest rates that are anywhere from two to three points above standard rates.
Contact an attorney
Those who have yet to file bankruptcy in Connecticut may be concerned about how they will rebuild their credit following bankruptcy so they can truly enjoy a fresh financial start. Those who have this concern or similar ones should contact an attorney in their area who can provide them with further information.