The largest benefit of bankruptcy is that you can relieve your overwhelming debts, such as medical debt, credit card debt and personal loans. However, you may notice that your credit report is affected by a bankruptcy filing.
After you file for bankruptcy, your credit score may go down as much as 200 points. This can affect your ability to apply for credit cards, loans and more. You can, however, work on improving your credit score immediately after filing for bankruptcy. Here is what you should know:
4 methods that can help
Your bankruptcy filing will stay on your credit report for ten years if you filed for a Chapter 7 bankruptcy or seven years for a Chapter 13 bankruptcy from the date of your filing. There are ways you can build your credit score while you wait for your bankruptcy to fall off your credit report, including the following methods:
- Stick to a budget: You can start building your credit score by knowing how much you make and spend each month. You may need to consider cutting back on certain expenses and work on building up your savings.
- Apply for more credit: While credit card debt may have led to your bankruptcy, it can also help you build your score. You could apply for a secured credit card and make cash deposits as collateral.
- Apply for a loan: You may consider applying for a credit builder loan. This loan can allow you to make small payments or one-time payments that build your credit over time.
- Become an authorized user: A friend or family may allow you to become an authorized user on their credit card. This can help you build your credit by being attached to the account.
If you’re considering bankruptcy to get out from underneath overwhelming debt, getting experienced legal guidance can help you learn more..
