Advice on Rebuilding Credit from Experienced Idaho Bankruptcy Attorneys
For more than 25 years, Foley Freeman has helped southern Idaho consumers and businesses take advantage of protections afforded under bankruptcy law. Bankruptcy offers many debtors the fresh start they need to achieve financial stability, but to actually enjoy full financial opportunity, it is necessary to rebuild credit once the bankruptcy process is complete.
Rebuilding Credit after Bankruptcy
An important part of rebuilding credit after bankruptcy is gaining an awareness of how credit bureaus collect and report debt. The three major credit bureaus, Experian, Equifax, and TransUnion, create credit reports by obtaining credit data from creditors and public records. The reports are then sold to individuals and organizations that have an interest in a person’s credit-worthiness, including lenders, insurance companies, landlords, and employers.
At the conclusion of bankruptcy proceedings, it is imperative for consumers and businesses to begin rebuilding their credit as soon as possible. Ways to reestablish credit include:
- Open a secured credit card with a bank or credit union. With a secured credit card, the cardholder gives some money for the lending institution to hold, and the credit limit on the card equals that amount. For a secured credit card to boost your credit score, the lending institution must report the card to the three major credit bureaus.
- Work toward opening unsecured credit cards. With an unsecured credit card, the lending institution does not require the cardholder to give any money up front to open the card. To rebuild credit, it is important to regularly use the card and pay the balance off in full each month.
- Make debt payments on time. Once new credit cards or loans are established, payments must be made on time, with no exceptions. Otherwise credit will be negatively affected once again.
- Avoid excess or unnecessary credit inquiries. Creditors make inquiries with one or more of the three major credit bureaus with each credit card or loan application. These inquiries, especially if there are many of them, can reduce a person’s credit score. Thus, do not apply for credit cards or loans that are unlikely to be approved.
At Foley Freeman, we understand that making a new start after bankruptcy can be intimidating for clients, but with diligence and care, a better financial future is possible. Our bankruptcy attorneys will help ensure that you have the tools to start rebuilding your credit.
Talk to an Experienced Treasure Valley Lawyer about Bankruptcy & Rebuilding Credit
If you are facing financial difficulties and mounting debt, bankruptcy may help restore you to positive financial health. For more information about the bankruptcy process and rebuilding credit, please contact Foley Freeman to schedule a consultation.