It goes without saying that life is completely unpredictable. Unfortunate and unexpected things such as job loss or health issues could cause an individual to build up tons of debt with seemingly no way to get out from under it. However, filing for Chapter 7 bankruptcy is a way Michigan residents can discharge overwhelming debt. Although bankruptcy can seriously damage a person’s credit, the damage is not permanent nor irreparable. Here are a few strategies to repair and rebuild credit following a bankruptcy.
Make payments on time
Timely and positive payments are the two things that will help a person’s credit score the most. Any time a payment is more than 30 days late, it can show on credit reports and stay there for up to seven years. To rebuild credit, it is imperative to make payments on time every month.
Be mindful about applying for new credit
It’s best to avoid applying for several new loans or credit cards at once. Part of an individual’s credit score is based on how many new credit applications he or she files. Several new applications all at once will usually make lenders wary of approving because they think the person is desperate.
Take it slow
Rebuilding credit just takes time. If the process is rushed, those who are working to repair their credit could end up making mistakes that will only delay progress. Only charge what is affordable and pay balances off every month.
Contrary to popular belief, bankruptcy is not financial death. Although it could take a few years, any person who has gone through a Chapter 7 bankruptcy could regain excellent credit scores. Those in Michigan who have questions about rebuilding credit or filing for bankruptcy could greatly benefit by consulting a seasoned attorney knowledgeable about bankruptcy law.
