Cunningham, Chernicoff & Warshawsky, P.C.

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As of May 29, 2020, Dauphin County, where our office is located, has moved from Red to Yellow status. Our office will re-open on June 1, 2020. Until further notice, Stay Safe Guidelines will be followed, including safe social distancing (6 feet), cleaning after each client and the wearing of masks by employees and clients at all times while in our office. People who are ill and those without masks will not be permitted entry into our office.

Rebuilding your credit after bankruptcy

While bankruptcy may give you relief from your debt now, there may still be a long road ahead of you. Rebuilding your credit can be an essential way to get your finances back on track.

Your credit after bankruptcy

After you have filed for bankruptcy, the filing will stay on your credit record for ten years and you will be ineligible to file again for another eight years. While most lenders will not be concerned that refiling will impact your debt to them, it is important that you find ways to rebuild your credit in the meantime.

Getting the right product to rebuild your credit.

When you need a loan or line of credit, it is important to choose the correct option for your budget and your needs.

  • Secured loan—This loan involves borrowing against the money that you deposit with the credit union or funds that are not accessible until you have made the necessary payments on the loan.
  • Secured credit cards—Backed by a pre-paid deposit, these credit cards usually have low credit limits, high fees and high interest rates. Forbes recommends using these credit cards to start rebuilding your credit but moving to a traditional card after a year or so.
  • Co-signed credit cards or loans—If you have a family member or friend with a good credit score, they can co-sign your credit card or loan. However, if you cannot pay your debts they will have to share the responsibility and the impact to their credit score because they co-signed on that loan.

While each of these can rebuild your credit score, it is important that you keep balances low and pay your bills on time. Avoiding late payments or high loan balances is key to rebuilding strong credit.

Speaking to a bankruptcy attorney or financial adviser could be a good way to explore these options and determine which ones are right for you. They can help you get relief from your debt today and take a meaningful first step toward your financial future.