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Easy Ways to Rebuild Your Credit After Bankruptcy: Learning New Habits

Easy Ways to Rebuild Your Credit After Bankruptcy: Learning New Habits

If your financial situation has led you to a point where bankruptcy was the only logical solution to get out from under impossible debt, then we hope you took that path. Both chapter 7 bankruptcy and chapter 13 bankruptcy are legitimate legal provisions to help alleviate the strain of overwhelming debt. That said, recovering financially from the inevitable credit hit after filing for bankruptcy in Ohio can be a difficult task. Thankfully, it’s not an impossible one.

Check out our top tips for building good financial habits and increasing financial literacy to get back on the right track. Stay tuned to learn how to use financial tools to your best advantage.

How Long Does It Take to Rebuild Credit After Bankruptcy?

Now that you’ve filed for bankruptcy, you’ve taken the first step on a solid path to financial stability. While it’s certainly the best way forward, you will likely encounter things that could be frustrating. One of these could be how long it takes to rebuild credit. 

As a rule, chapter 7 bankruptcy remains on your credit report for 10 years. At this point, the record of bankruptcy will be completely wiped off of your credit report. Chapter 13 bankruptcy filers will see their credit report cleared of the bankruptcy after seven years’ time. 

Seven to ten years is a long time to wait, but you can take steps to immediately begin improving your credit. The bankruptcy process alone–paying down debt to repay creditors–begins to  lower your debt-to-income ratio, and the results to your credit score from reducing overall debt can often be seen in as little as one or two years. Beyond that, repairing your credit score largely depends on the independent steps you take to actively improve your financial health. 

Get Familiar With Your Credit Report

Learning how each part of your financial story fits into your credit report can help you to better plan and manage your score. You can request a free annual report by visiting AnnualCreditReport.com and Equifax offers a free monthly credit report to myEquifax account holders. 

Once you have that important documentation you can make sure that all the information is correct. You can also see which areas may need the most improvement and target your efforts accordingly. It’s important to do this yearly so you can track the work you're doing and ensure that after the obligatory 7- or 10-year period, the record of your bankruptcy drops off of your credit report. If you do notice errors, you can contact your lender or creditor first to try and resolve the problem. You can also file a free dispute with Experian and TransUnion and work with a bankruptcy attorney to get incorrect details updated. 

It’s also worth monitoring your credit score regularly for any signs of potential identity theft or other issues. If you notice loan applications, inaccurate account statuses, or unrelated civil suits or judgments, those are serious red flags–get with your trusted bankruptcy attorney to investigate further and help you to correct those mistakes. The sooner these problems are resolved, the better your credit score will be, both short-term and especially in the long run. 

Master Responsible Credit Basics

Your credit score will improve as your bankruptcy fades into the past, but healthy financial habits are necessary to truly rebuild your credit after bankruptcy. Here are a few recommendations to get started:

  • Keep all payments (bills, credit cards, loans, etc.) consistent and on-time
  • Use credit cards judiciously, especially if this is how you got into debt in the first place
  • Maintain low credit balances, both to reduce credit card usage and to positively affect your credit score
  • Focus on building an emergency fund to cover unexpected costs (vehicle, medical, etc.) that you would previously have put on credit

Even with these bonafide good credit habits in place, patience is key. It will take months to years for you to see a noticeable difference in your credit score. But with determination, persistence, and consistency, you will get there. Once your score does begin to increase, don’t drop the ball–keep up your good habits and your score will climb higher still.

Join a Credit Counseling Program

Whether you file for chapter 7, 11, or chapter 13 bankruptcy, a credit counseling program can do wonders to getting you back on your financial feet. Here at Hausen Law, we are your advocates to help you link up with the necessary knowledge and resources to work on improving your credit from day one. We are happy to offer clients access to the 720 credit repair program via our professional partnership that includes a credit education course and ready help to rebuild credit.

The 720 credit repair program offers you a deeper understanding of finances and credit in general, including how to read and analyze your credit report and how to use that information to create a plan to rebuild credit. Within less than two years your credit score can improve and you can have a renewed sense of hope for your financial future.

Rebuild Credit After Filing for Bankruptcy in Ohio

Directly after your bankruptcy proceedings, all efforts are focused on repayment. But rebuilding your credit should also be top priority. At Hausen Law we know it’s difficult, but with the tips in this article and by taking advantage of our 720 repair program, we know you can reach your financially healthy goals. Working with an experienced chapter 7 bankruptcy lawyer–like James Hausen and his team–is a great first step. At Hausen Law our Ohio bankruptcy lawyers are ready to help. 

Give us a call or fill out our online contact form and we will be in touch. Hausen Law is happy to serve all of Northeast Ohio, including the Akron, Canton, Cleveland, Wooster, Dover/New Philadelphia, and Youngstown communities. Contact us today to set up a free consultation and get started on your way to financial recovery.

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