Bankruptcy allows people to relieve overwhelming credit card, medical and personal loan debt. This helps many families that struggle to afford basic necessities because they are focusing on paying off their financial obligations. However, this is one major drawback to bankruptcy. The debtor’s credit score will likely drop.
A low credit score can make it harder for people to apply for loans and credit cards. However, debtors should know that they do not have to live with a low credit score forever. Here is what you should know:
Can you restore your credit score?
With time and the right steps, a debtor can raise their credit score again. It will likely not be easy. It may take several years for debtors to raise their credit scores again. Here are a few ways to restore a credit score after bankruptcy:
- Make on-time payments: Debtors may be able to continue making purchases and payments on existing credit cards. By making timely payments, debtors can easily raise their credit scores.
- Get a secured credit card: It may be possible to get a credit card after a successful bankruptcy filing. Many of these credit cards have high fees and interest rates. However, with the right credit card, purchases and payments can increase a credit score.
- Get a co-signer: Debtors may get help from others to raise their credit score. Someone with a good credit score may co-sign a loan to help the debtor.
- Apply for retail store credit cards: Many retail stores offer customers credit cards that allow them to build up their scores.
Legal guidance can help debtors explore their bankruptcy options.