Chapter 7 is an excellent bankruptcy option for debtors with terrible credit. Once you complete Chapter 7, your financial slate is wiped clean and you can start restoring your credit immediately! While your bankruptcy will be listed on your credit report for 10 years, you can still improve your credit score by making positive financial choices.
Track Your Credit Score
There are several free services that allow you to periodically check your credit report and track your credit score. While your credit report is only free as an annual service, you can track your credit score monthly through your credit card company or a personal finance website.
Budgeting is the first step in building a strong financial foundation. It’s important to review your weekly paychecks and plan out your future expenses. By creating a budget plan, you can monitor your finances and keep track of your spending habits. If you need help, seek out bankruptcy lawyers or a nonprofit credit counseling agency.
Build an Emergency Fund
A great benefit of creating a budget plan is knowing how much money you can afford to put into a savings account. By adding to your savings account after each paycheck, you’ll be able to improve your financial situation and have money saved for an emergency.
Pay Your Bills
The quickest way to improve your credit score is to pay your bills on time. After all, about 35% of your credit report is based on your purchase history.
Avoid Credit Repair Agencies
Credit repair agencies prey on people who are desperate to reestablish their credit. If you sign a contract, you’ll end up paying expensive, on-going fees for services you can perform yourself.
Apply for Credit
You’ll likely be mailed many low-balance credit card offers following your bankruptcy. You should them away if you’re serious about improving your credit. Your best bet at reestablishing your credit is to apply for a secured credit card. This credit option requires you to pay off your balance each month, keeping you out of debt while your credit score rises.
Rely on Your Attorney
Bankruptcy can be confusing and stressful, so it’s important to retain the support of an experienced and reliable attorney. At Bach Law Offices, our Northbrook bankruptcy lawyers can guide you through the bankruptcy process and teach you how to restore your credit.
Contact Bach Law Offices at (847) 448-0025 to start improving your credit today!