Because a bankruptcy can destroy your credit rating, it's best to avoid a filing if possible. However, due to debt and other credit problems, bankruptcy sometimes can be the only alternative. You can expect a significant drop in your credit score following a filing. But the effects of a bankruptcy do not last forever. The bankruptcy will stay on your credit report for 10 years, but you still can improve a low score.
Instructions
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Continue to make vehicle loan payments to your lender. You don't have to include your automobile in the bankruptcy. If you decide to keep the vehicle, make on-time payments for the duration of your loan term to add positive history to your credit report.
2Make other loan payments as required. Federal student loans are not included in bankruptcy filings, and like auto loans, you can continue to live in your property and pay the mortgage. Maintain a good history and account standing with your mortgage company and student loan lender. Each on-time payment helps improve a low credit score after bankruptcy.
3Open a new line of credit. Getting credit after bankruptcy is challenging, but doable. Check with your bank or credit union and ask about bad credit or secured credit cards. These require a one-time payment of a security deposit, usually between $300 and $500.
4Improve your credit with a new auto loan. If you don't have a vehicle, consider an auto loan with a bad credit or subprime auto lender. These vehicle loans have higher interest rates, so it's best to shop around and make comparisons. Make your monthly payment on time each month to add points to your personal score.
5Examine your credit report after the discharge. Once a debt's been included in a bankruptcy and discharged, credit reports should reveal that these accounts were included in the bankruptcy. Check your report to make sure your creditors have updated your account. If not, your report may show overdue or past due accounts, which can cause further damage to your score.
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