Experienced Bankruptcy Attorneys Helping You with Credit Restoration
Serving the Pierce County and Tacoma, Washington Areas
Do not allow yourself to believe the bankruptcy myth which says that bankruptcy destroys your credit. On the contrary, bankruptcy eliminates the debts that caused your poor credit in the first place and therefore allows you to restore your credit. After you’ve gone through the bankruptcy process, you no longer have excessive debts hanging over you and adding to your default. Instead, you get a fresh start on life so that your financial stability increases instead of decreases. Washington Fresh Start can assist anyone in both bankruptcy and the credit restoration process.
Ways to Rebuild Your Credit
There are numerous actions that you can take to restore your credit after bankruptcy. One of the most important is to create a feasible budget and to stick with it. Unless you are able to establish responsible spending, filing for bankruptcy will do little to prevent additional debt in the future. Once you’ve set up a budget and have saved up some money, you might apply for a credit-building credit card that has a small limit and excellent benefits. By purchasing necessities with this card such as groceries or gasoline, and by making your payments on time, you could be surprised how quickly your credit score begins to rise. Within a few short years, your score could be higher than you ever thought possible.
One of the best ways to quickly build a payment history is to use a credit card. A secured credit card can help with this step if your poor credit precludes you from qualifying for a “regular” credit card. A secured card requires that you keep money in a linked savings account as collateral. Because the money is already there, it is easier to get approval for a secured card — especially when you have poor credit. In either case, your payments are reported to the bureaus every month, so it makes a big difference in showing that you pay regularly — and on time
After a few months, ask if your secured card can be “upgraded” to an unsecured card. If you stay within your balance, and make your payments on time, it should be possible to transform your secured card into an unsecured card. This will also give your credit score a bit of a boost.
Remember, though, that any credit card isn’t an excuse to spend more money. Whether you get a secured card or use an unsecured card, getting a card just to “free up” more money that you don’t actually have to spend out of control won’t help you in the long run. You have to keep a tight rein on your spending. If you can’t change your habits so that you are in control of your spending, don’t get a credit card, secured or unsecured.
Payment history is an important factor in your credit score, so do your very best to not miss payments on any existing or new debt. Utilize your lender’s online reminders and consider setting up automatic payments if you have a set amount budgeted for debt repayment each month.
If you’re in a real bind with making a payment, make sure to make at least the minimum payment due or contact your financial institution and talk with them about the possibility of extending the due date. While it is important to not miss payments, avoid borrowing from high-interest lenders as this may ultimately compound your debt problems rather than resolving them.
Another smart move: Keep an emergency reserve.Bankrupt consumers are in a better position to save because they’ve eliminated their debt and they need to plan for their financial future again. It is best if you can save 10% of your income, and the minimum is whatever you can manage. Save pennies or change if you have no room in your budget.
Be sure to watch out for predatory-lending scams and payday loans. Predatory lenders seek credit-impaired consumers and charge them exorbitant fees for borrowing money. Payday loans let consumers postdate a check for the amount of the loan and the fees for taking out the loan. Those fees are the killer. Credit counselors say you could end up paying as much as 400% interest with a payday loan.
Find a Bankruptcy Lawyer in Tacoma, WA
Speak with Attorney Dave Yando today to learn exactly what an experienced Tacoma bankruptcy lawyer can do to guide you through the process of credit restoration. Washington Fresh Start can act as a guide and can help keep you accountable as you seek to get out of debt, rebuild your credit, and find financial freedom. We offer a free case evaluation, so you have nothing to lose. Contact us right away to consult for free with a knowledgeable bankruptcy and credit restoration attorney.