David S. Osterman, Esquire

Appointments are available Tuesday and Thursday evenings and on Saturday mornings.

40 Bay Street
Manchester, New Hampshire 03104

Tel: 603-626-5450
Toll Free: 866-855-2999
Fax: 603-626-5453


Rebuilding your credit after bankruptcy takes some time and perseverance, but it will greatly improve the quality of your financial future and is worth the effort. In 2012, 1.2 million Americans filed for bankruptcy, and nearly 15% of Americans were considered underemployed. If you are one of the millions of Americans who have filed or who will file for bankruptcy and are worried about rebuilding your credit, do not despair.

If you can, keep a $0 balance credit card through bankruptcy that you can use after your other debts have been discharged. You can use this card to help rebuild your damaged credit. If you are not able to keep such a card, consider obtaining a secured credit card. Once your debts have been discharged, save as much money as you can—ideally at least $500—and put it toward a secured credit card. Be sure that the secured credit card you choose reports to all three major credit bureaus—Experian, Equifax, and TransUnion. When you open a secured credit card, it works much like a debit card. If you give the lending institution $500, you are only able to spend up to that amount, but never more. It helps to keep you in financial balance so that you are not making the same mistakes twice and spending more than you can afford. Be sure to avoid pre-paid credit cards, which are similar to secured credit cards except that they typically do not report to any major credit bureaus. The point of a secured credit card is that it will report to the credit bureaus each month and show that you are being responsible with your money. After 12-24 months of good spending habits with your secured credit card, inquire about switching to an unsecured card with that same lender.

Once you’ve had a secured credit card for 6-12 months, consider applying for a gas or retail credit card that you can pay in full each and every month. A gas card is a great financial tool to help rebuild your credit because you aren’t likely to splurge at a gas station and spend more than you can afford. Be sure to pay the balance in full each month, as gas and retail cards tend to have very high interest rates. Also be sure that the credit card you choose reports to all three credit bureaus so that your smart financial decisions are being documented.

Avoid the urge to apply for many credit cards. Too many inquiries into your credit report can hurt your score. Instead, pay for essentials with cash or debit, and resist overspending on non-essential items. Use a checking or savings account to save as much money as you can each month. In the event of an emergency, you can use cash savings as means of payment rather than credit. Additionally, establishing a good relationship with a local bank or credit union can help you in the future should you require financing. And remember, once you do get credit after bankruptcy, be sure to use it wisely. Those who do not use the credit they are eligible for will never rebuild your credit. You need to use credit to rebuild credit.

Be sure to pay all of your bills on time. Making late payments on utilities and so forth can hurt your credit score and show future lenders that you are unreliable. If you are unable to pay your bills on time, you are likely spending too much money elsewhere and need to sit down and re-examine your budget and focus on spending less money on non-essential items.

Repairing your credit takes time and determination, but getting your score above the very important 700 mark is worth the effort. Don’t be discouraged by your financial past. Instead, focus on your financial future and make good decisions today that will benefit you tomorrow.

Rebuilding your credit after bankruptcy takes work, but it’s definitely worth any difficulties involved. With proper knowledge and determination it won’t be as difficult as you think it will be.

If you do not start to rebuild your credit soon after you are discharged in bankruptcy, you may find yourself with no way to pay if your car breaks down or your furnace fails down the road. Anticipate life’s emergencies. Rebuild your credit as soon as you can.

May 2nd, 2013 | By admin | Filed under: Uncategorized   
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