Once you declare bankruptcy, it will have an effect on your credit score, finances and personal life. Your credit score usually reduces the weeks before you file for bankruptcy with the help of a Houston bankruptcy lawyer, like Busby & Associates.
Every time you miss paying your mortgage auto loan or credit card, your credit score suffers. As soon as you declare bankruptcy, your credit score will further decline. This declaration will stay on your credit report for 10 years, which means that your FICO rating will be low after this event.
Ensure that You Pay Your Bills on Time
Your payment history makes up for 35 percent of your overall rating, so it has a significant impact on your credit score. The easiest method to recover your credit score is to keep paying your dues on time. Consider putting some reminders on your calendar each month during the due date to avoid forgetting about it. You can even set up an automatic payment system to ensure that you pay your bills on time.
Carefully Apply for Credit
Applying for a credit card after declaring bankruptcy might seem like a bold and thoughtless move, but it can actually rebuild your credit score. As long as you don’t repeat mistakes in the past and settle the full balance on the due date, you will be able to mend your credit score. Although, you do have to open a secured card, so the issuer can ask you to place a security deposit.
Understand Your Limitations
When you’re trying to rebuild credit, it is vital that you maintain a positive financial standing. Remember what your credit limit is and ensures that your balances are well below the amount. Use your credit cards lightly and settle your dues on time, each time.
Declaring bankruptcy doesn’t mean you cannot try to restore your positive credit score. Improve it and get back up on your feet by obeying the listed steps above.