As you can imagine, you should expect that filing bankruptcy will make your credit score drop. Depending on what your score was before you filed, it can take a fairly significant hit. One of the biggest misconceptions, though, is that you won’t be able to get credit for ten years after you file. You might be surprised to learn that you’ll be offered new credit shortly after you file. Unfortunately, the interest rate on those offers will be ridiculous.
The good news is that by taking certain steps after your bankruptcy, you can rebuild your credit score and get your interest rates down. One of the better ways to rebuild your credit is by using a secured credit card. Secured credit cards are offered by many lenders, just do an online search. A secured credit card requires you to pay a deposit, say $500. At that point you’ll be given a $500 line of credit.
Historically, the advice given in using the card to rebuild your credit was to pay the minimum amount. That advice appears to be changing. Now credit bureaus are recommending that you pay the balance in full every month. Practically speaking this is good advice as well. You don’t want to put yourself in a position where you can’t repay your debt. Instead, use your new secured card for monthly living expenses like groceries, gas, and clothing. At the end of the month, pay the balance in full. This should be a good approach in making sure you can repay that debt. By using this simple technique your ability to get credit at reasonable interest rates will come sooner than you think, and you may even be able to afford a mortgage before you know it.
If you have questions about how you can rebuild credit score after you file personal bankruptcy, we hope you’ll come in for a free, no-obligation consultation with an experienced Colorado bankruptcy lawyer. You can schedule your appointment by calling 303.331.3403 or by using our online scheduling system.