Kent & Wittner, P.S.

ROY W. KENT | BRETT L. WITTNER | KELLY M. WITTNER

Putting Lives on Track.

"Our top priority is to make each client feel valued and respected. We know that families in distress are under a lot of pressure. We also understand that we might not catch you at your best. Don’t worry. We keep a box of tissues always at the ready and are prepared to listen and work through any issue.Our goal is to make sure you leave with a smile on your face – even if you didn’t come in that way."

How can I rebuild my credit after bankruptcy?

Filing bankruptcy is a very important financial decision. It will reduce your credit score because it shows that you were unable to repay your creditors. However, there are steps that you can take to rebuild your credit score after your bankruptcy ends. 

The first step to rebuilding your credit after Chapter 7 bankruptcy is to obtain copies of your credit reports from Equifax, Experian, and Transunion. You can obtain a free copy of these credit reports at www.annualcreditreport.com. Once you have obtained your credit reports, you should look at them closely to make certain that all of the information is accurate. It is not uncommon for credit reports to still indicate that you owe money to creditors that were discharged in your bankruptcy. If that happens, you should dispute those items with the credit bureaus to make certain that everything is reported correctly. 

The next step to rebuilding your credit after bankruptcy is to simply make certain that you pay all of your bills on time and never allow anything to go to collections. If you have a large medical bill after your bankruptcy, it is important that you make payment arrangements with your doctor and make sure to never miss a payment. Do this before the doctor sends your bill to collections. 

You should be very careful about the type of credit you attempt to obtain after your bankruptcy discharge. Once you file bankruptcy, your mailbox will be swamped with advertisements for credit cards, personal loans, and car dealerships. Most of these creditors are offering you credit because (1) they know that you filed bankruptcy, (2) they know that you cannot file another Chapter 7 bankruptcy again for eight years, and (3) to try to take advantage of you. Be careful to read the fine print on these advertisements. Many of these creditors will charge high annual fees, high interest rates, and may not provide a grace period before they start charging you interest. 

You may want to apply for a secured credit card after your bankruptcy is over. A secured credit card is one where you give the credit card company a deposit and they give you a credit card with a spending limit equal to your deposit. It is not the same thing as a prepaid credit or debit card. Look for a secured credit card with the lowest annual fee and the lowest interest rate that you can find. Make sure that there is a grace period so that the credit card company will not start charging you interest on the same day that you make your purchase. Once you have your secured credit card, you should use it every month and pay the balance in full every month. By doing this every single month, and by making sure that no other bills are missed or paid late, your credit score will start to improve. You may find that your credit score quickly rebounds to a higher score than you had right before you filed for bankruptcy. 
  
Finally, you should continue to monitor your credit reports to make certain that all of the information on your credit reports is accurate. Some people pay for a credit monitoring service. I recommend that you continue to pull your credit reports at www.annualcreditreport.com and monitor your credit for free. This website allows you to review each of your credit reports once per year free of charge. We recommend that you review one of your credit reports every three or four months. Rotate the credit reports that you review and you will never be required to pay to view your credit reports.