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How to Rebuild Your Credit After Bankruptcy

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Bankruptcy does not just affect the money you have available — it may also damage your credit score. Boosting that score will take some time and discipline, but it is possible.

The following are some steps to help you rebuild your credit after bankruptcy:

  • Know where you stand: Review your credit reports to figure out where your rating stands so you know how far you have to go and how much time it will take to get there. Typically, a score over 700 is good; those over 750 are excellent. A credit rating under 640 is poor and anything under 400 is very poor.
  • Find inaccuracies and report them: Occasionally, credit reporting agencies make mistakes on your report that can impact your score. If you find any mistakes on your credit report, make sure you report and dispute them as soon as you can so your credit score more accurately reflects your situation.
  • Create (and stick to) a strict budget: You will need to adhere to good financial practices for a long time. Developing and maintaining a sound budget is a great first step toward becoming more fiscally responsible and preventing further damage. Reduce your expenses as much as you can to create room for debt repayment and savings. If possible, find ways to increase or supplement your income.
  • Pay all bills on time: Your payment history accounts for 35 percent of your credit score, so making all your payments on time helps you gradually increase your score. Late payments will stay on your credit history for years, so it will take patience and commitment to get to the point where your credit history is helping more than hurting you, but it is worth the effort.
  • Set some money aside for savings: It might seem impossible or unreasonable to even think about savings when you are digging your way out of significant debt. However, even putting in less than 5 percent of what you’re making each month will help. Having emergency money on hand will also allow you to manage unexpected expenses.

To learn more about your options, consult with an attorney at Miller Law Group PC, working as a debt relief agency serving central Virginia.