People who are interested in filing for bankruptcy in Tampa often worry about what the process will do to their credit. Fortunately, the idea that bankruptcy damages one’s credit is a myth. In fact, the bankruptcy process can improve your credit by eliminating your debts. However, securing credit again after bankruptcy does take some time and patience.
Rebuilding Your Future
The biggest culprit of credit damage is debt. More specifically, defaulting on your credit accounts and having unpaid debts is what damages your credit. When debts are resolved in bankruptcy you are given a unique opportunity to start fresh with your finances and establish a positive credit history. To do so, you need to secure new lines of credit, but doing so isn’t always easy. In order to find the best line of credit post-bankruptcy do the following:
- Monitor your credit report for accuracy and make sure your accounts have been updated after the debt discharge.
- Shop around to different lenders looking for the most favorable terms on a credit account, like lowest interest rate.
- Avoid secured lines of credit and, instead, find one or two low limit unsecured lines of credit to use for the first six to twelve months.
- Know your limits and make a habit of using your credit wisely, keeping your total debt balance under 30% of the total spending limit and always making timely payments.
Following these simple steps can put you on the right path to rebuilding your credit and providing you with the right type of credit account.