Whether you have recently completed a bankruptcy or are currently contemplating filing for bankruptcy protection, you may wonder what your financial future looks like after this experience.
While significant debt leads a person to a situation where they must seek help via a Chapter 7 or a Chapter 13 bankruptcy, they should know that rebuilding their credit and enjoying a positive financial life after a bankruptcy can happen.
Starting out after a bankruptcy
When fresh out of a bankruptcy, you may see an immediate jump in your credit score. As explained by Credit Karma, this reflects the fact that your debt-to-income ratio has improved as you are no longer saddled with the excessive debt that put you into a bankruptcy in the first place. At this stage, you may want to find ways to keep improving your score.
Obtaining even one new credit account may help a post-bankruptcy consumer. It may be wise and even necessary for this to be a secured form of credit, like a vehicle loan or a secured credit card. The goal with this account should be to show creditors that you have learned how to have, use and manage credit responsibly. This means you should make all payments on time. If you have a secured credit card, paying it off in full every month may benefit your credit score.
Co-signers may help
You may request a family member to co-sign on a new credit account. This may open up more credit opportunities for you than applying on your own.
This information is not intended to provide legal advice but is instead meant to help residents in Minnesota feel confident that they can have a bright financial future with a healthy credit score after previously filing for bankruptcy.