(719) 520-0003
is a major financial step that can help you get away from overwhelming debt. It
can seriously impact your credit, however. After your bankruptcy is final, it’s
important to take steps to repair your credit and build strong financial

How Bankruptcy Affects Your Credit

number of factors impact your credit score, including your debt-to-credit
ratio, account length, collections accounts, and late payments. Declaring
bankruptcy may immediately cause a significant decrease in your score, but
avoid panicking. There are many ways you can begin improving your credit and
preparing for a bright financial future.

The 2 Types of Credit You Need After Bankruptcy

are two types of credit you should apply for after bankruptcy. Having both can
help you create a diverse credit report. Installment credit, which includes
items like mortgage payments, car loans, and student loans, requires monthly
payments for a set period of time. It’s important to build a history of on-time
payments on your installment debts. A loan for a pre-owned car or federal
student loan can help you establish a consistent payment history.

credit includes credit cards. As you make payments, you free up your available
credit for spending. With revolving credit, you want to pay on time and maintain
an appropriate debt-to-credit ratio. Typically, credit bureaus prefer that
consumers use less than 30% of their available credit. Maintaining a revolving
credit above that 30% mark may negatively impact your score.

Get a Credit Card After Bankruptcy

many people, a credit card is the easiest way to begin building credit after bankruptcy in
Colorado Springs
. Compared to loans for large items like houses and cars, credit
cards are often available with lower limits to minimize risk. You are free to
apply for any cards you wish, but your approval odds may be lower than they
would be for preapproved cards. There are quite a few cards that are
specifically designed for people with a recent bankruptcy. They often have low
credit limits and high interest rates. If this is the route you decide to go,
use it wisely and avoid carrying a high.

Monitor Your Credit Report After a Bankruptcy

crucial to keep a watchful eye on your credit report after bankruptcy. You can
pull one free report through each of the three credit bureaus annually. When
you check it the first time after bankruptcy, make sure there are no accounts
listed that should have been discharged. As you continue to build you credit,
keep an eye out for erroneous collections accounts and verify that all reported
information is correct. If there are any accounts that aren’t yours or
information has been reported incorrectly, report it promptly to the bureau for

Wipe the Slate Clean and Find Out If Bankruptcy
Can Help You Start Fresh

For many people who have gotten in over their heads, bankruptcy offers the chance to start anew. If you’re unsure if bankruptcy is the right choice for you, or you’re curious about different filing options, contact Kinnaird Law at (719) 520-0003 for a free case review and a discussion about your options.

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