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One of the key deciding factors in filing for a personal bankruptcy is if you’re prepared to work through the credit impacts it has in the months and years following. Many people don’t take this into consideration, but the effects of a personal bankruptcy don’t end once the proceeding closes and you’ve finished your liquidation or repayment plan. 

The good news is, there are steps you can take almost immediately following the end of your bankruptcy filing to begin rebuilding your credit. Check out our tips to help jumpstart that process below. 

How Personal Bankruptcy Affects Credit

In short, not all bankruptcies will actually drop your credit score, but in most cases, you’ll find it harder to acquire credit of most kinds. Potential lenders look at your total financial history when considering credit and having a bankruptcy on your record signals a big roadblock. Bankruptcies stay on your credit report 10 years after you file. 

Regularly Monitor Your Credit Report

Creditors may continue to report negative information on your credit report, even after your bankruptcy proceeding ends, so it’s important to check your score every 6-8 months. You do have rights to challenge any discharged debts on your report that show as active. Having an accurate credit report is a good first step in rebuilding credit. 

Stick With One Employer

If you can stay with one job in the initial months and years following a bankruptcy, that will show potential lenders a record of responsibility and discipline. Any signs of stability that you can show in your favor will go a long way, especially as your credit continues to recover early on post-bankruptcy. 

The Best Way to Rebuild Credit Following Bankruptcy 

Easily the single best way to rebuild credit is to make payments on existing or future credit on time and consistently. You should keep new balances low, never acquiring totals that are more than 30% of your credit limit (less than 10% is really ideal). Some creditors will allow you to enter a reaffirmation agreement to pay off old debts prior to bankruptcy to help rebuild your score as well. 

The team at Natural State Law has a track record helping Little Rock residents work through personal bankruptcy and advising them on what happens once the proceeding closes. Call us today at (501) 916-2878 to learn more and schedule a free consultation.