Most people think it’s difficult to re-build your credit, but that’s just not true.

For the first time in a long time, you won’t owe any money.  For many people, that means the need for credit will simply disappear.

Once you are free from you debt, you’ll actually have the money you need to live your life and meet your expenses.  It’s a whole new world.

Banks know that, which is why you’ll get a lot of credit card offers in the mail immediately after your case is finished.  Banks want to lend you money because they know you have no other debts to pay.  They also know you can’t file another Chapter 7 for eight years, so they are almost guaranteed that you’ll pay them back.

The fact that there is a bankruptcy on your credit record does not mean that you will never be able to get new credit. All it means is that you will need to put time and distance between yourself and the bankruptcy filing; remember that the decision to give new credit (including a mortgage or a car loan) is based on what you’ve done lately, not what you did five years ago.

Many of my clients have credit good enough for a mortgage or a car loan in as little at 18 months. I’ll work with you to put together a step-by-step strategy for updating your credit report, re-building your finances and putting you in a better situation.

There are ten easy steps you can take immediately to jump-start your credit after bankruptcy.  They are:

1. Open a checking or savings account.

2. Pay your bills automatically from your checking account each month so that you can always be sure to remain current with new obligations.

3. Ask your employer to take 10% of your pay check and deposit it into your savings account. This will help you save for emergency expenses so you don’t need to dip into a credit card.

4. Once you have saved up three (3) month’s worth of salary in your savings account, ask your bank for a secured loan against the account. Pay the entire loan back on time so it is reflected as a positive mark on your credit report.

5. Pay your utility bills and rent on time.

6. Stay away from payday loans.

7. Live within your means. Do not unnecessarily increase your debt to income ratio by taking on credit to purchase luxury items that you DO NOT NEED. Your payments on consumer debt should equal no more than 20% of your expendable income after costs for housing and a vehicle.

8. If you have any debts that survive the bankruptcy, pay them on time every month. This will show new potential lenders that you have the ability to repay your new debts on time.

9. Check your credit reports every six months and make sure that all information is accurate. You should correct credit report inaccuracies so that potential new creditors will know which debts are no longer your responsibility.

10. Minimize the number of inquiries on your credit report. Every time a potential creditor makes an inquiry into your credit, your credit score can go down. To combat this, you should call (888) 5 OPT OUT and follow the voice prompt. Calling this number allows you to opt out of promotional mailing lists sold by credit bureaus.

I’m always amazed when people come to me and tell me that they don’t think they’ll ever get new credit after bankruptcy.  I’m never amazed when they call me two years later to let me know they’ve bought a new home and have fantastic credit scores.

If you want to talk about how bankruptcy can actually help you increase your credit score and put you in a better situation, just call my Office toll-free 24 hours a day, 7 days a week at 1-866-473-1996.  You’ll be glad you did!

Best regards,

Ryan Moran