Rebuilding Your Credit

Bankruptcy Can Fix Bad Credit

Many people avoid filing bankruptcy because they are afraid it will ruin their credit. In reality, if you are behind on your bills and significantly in debt, your credit score may have nowhere to go but up. Filing bankruptcy can actually be a way to improve your credit.

After you obtain a discharge of debt by filing bankruptcy, you will have significantly less debt than you had before. If you are able to keep up with your bills after bankruptcy, your credit will begin to improve, perhaps even faster than you think. At the Maida Law Firm, P.C., the Houston bankruptcy lawyers offer a free case evaluation to help determine the effect that bankruptcy might have on your credit. With offices in Beaumont and Houston*, the firm serves clients throughout southeast Texas and the Texas Gulf Coast who need assistance rebuilding their credit.

How do I rebuild my credit after bankruptcy?

There are three main credit reporting agencies: Equifax, Experian, and TransUnion. Each of these agencies can assign you a credit score based on factors such as your credit history, whether you make payments each month on credit card balances and loans and how much of your available credit you are using. Your credit history will go to zero after you file bankruptcy. For this reason, it's important to obtain a new credit card right away so you can start rebuilding your credit history. You may need to get a secured credit card initially.

Once you have a credit card, it is important to stay current on your payments. If you have a car loan or mortgage, you need to stay current on those payments as well for your credit to improve. You should be careful how much of your available credit you use. Ideally, you should pay off credit balances at the end of each month. Don't take out multiple credit cards and carry a balance on each. You may end up in significant debt again.

If you follow these three steps, you should be able to rebuild your credit in one to two years. While your bankruptcy filing will remain on your credit report for ten years, bankruptcy does not have the stigma it once had. If you are in need of legal assistance to rebuild your credit, it is important to discuss your case with a bankruptcy attorney in Houston or Beaumont from the Maida Law Firm, P.C. They serve clients throughout Beaumont and Houston*, so call today!

*Houston office available by appointment only. Not staffed by full time attorney.

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