When Michigan residents fall ill or lose their jobs, a myriad of financial troubles may ensue. Oftentimes, those who are in this position accrue high amounts of debt with seemingly no way out of it. When this happens, filing for Chapter 7 bankruptcy is an option they may choose to pursue. It’s no secret that a bankruptcy will do serious damage to a person’s credit scores, but the damage is not beyond repair. Here are some ways to repair credit after going through a bankruptcy.
Make other payments on time
Not all debts or accounts owed will be included in a bankruptcy. For example, student loans usually can’t be discharged. Any debts or accounts that are still active will affect a person’s credit score. Be sure to make timely payments on existing debts.
Obtain new credit
Getting new credit is one of the best ways to rebuild credit. However, getting new credit can be difficult following a bankruptcy. However, those who have declared bankruptcy cannot do it again for another seven years, so some credit card companies will approve applicants who have gone through a previous bankruptcy.
Keep credit card balances low
People with the best credit scores tend to keep their credit card balances low. Those who are looking to rebuild their credit will want to keep their credit card balances at about 30% of the credit limit or less. This will show that the person is managing their credit well.
Rebuilding credit after a bankruptcy just takes time. Although it can take a few years, any individual who has gone through a bankruptcy can eventually have excellent credit scores. Any person in Michigan who has questions or wants to learn more about bankruptcy or repairing credit can obtain much-needed guidance by consulting an attorney who is knowledgeable in bankruptcy law.
