Bankruptcy can take a lot out of a person, and it can also hurt a person’s credit score. But rebuilding credit after bankruptcy is something that can be done with a little work. People who have filed for bankruptcy recently often have bad credit, and it takes a little bit of time to show lenders that you deserve credit again.
Shortly after a bankruptcy, it is hard to get credit – but it is not impossible. Banks are less likely to lend you money, and if they do, it will be at a higher rate than for someone who has a better credit score. It is a good idea to focus on paying debt that you already have, for example, paying debts that were not erased as part of your bankruptcy. Paying down your debts helps to build your credit score. This makes you a better candidate for a loan or a line of credit in the future.
With fewer debts to pay off after a bankruptcy, you may be able to set some money aside for savings. By starting a savings account, you are building a fund that you can use when debts creep up in the future. Even saving a small amount can help you in the future. Having the money to pay off future debts will keep your credit score growing in a positive direction.
People who have difficulty managing money sometimes fall victim to scams or bad loans. This is all the more likely after a bankruptcy, when many banks don’t want to make loans. But some scammers may have no problem lending to you. These scams make money by charging ridiculous interest rates on the loans they give – interest rates that are so high you are unlikely to ever be able to repay them. While the loan amount might be small, just a few hundred dollars, the interest builds quickly. This can leave you with a new debt that you are unable to pay, and since you recently filed for bankruptcy, you will be unable to file for bankruptcy again for several years. If you need a loan, see if there is any other way that you can get one, rather than depending on a scam. Staying away from these types of loans can help keep your credit score going up.
If you are thinking about bankruptcy but are concerned about what the impacts of filing bankruptcy might have on your life, you can discuss your situation with a Michigan bankruptcy lawyer at The Office of Karen E. Evangelista, PC. Feel free to contact us today at 248.652.7990 or send us an email through our online contact form available below.