Many people across Texas who are struggling to stay on top of their finances explore the idea of filing for bankruptcy. Yet, many potential bankruptcy filers hold off on doing so out of fear about how it might impact their credit score. While filing for bankruptcy may cause your credit to take a temporary hit, there are certain steps you might take after your bankruptcy case closes to help rebuild your credit score and get your financial affairs back in order.
Per Chase Bank, how, and how much, a bankruptcy case impacts your credit score depends to some degree on the type of bankruptcy for which you file. Typically, a Chapter 7 filing is going to impact your credit for about 10 years. If you file for Chapter 13, your bankruptcy comes off your credit report seven years after you file. Regardless of whether you file for Chapter 7 or Chapter 13, you may find it worthwhile to take the following steps to help rebuild your credit afterward.
1. Pay all debts on time
You do not have to wait for the bankruptcy to come off of your credit report to get your credit score moving in the right direction. Staying atop your bills is a key part of rebuilding credit after bankruptcy.
2. Become someone’s authorized user
It may also help you strengthen your credit score if you become an authorized user on someone else’s credit card.
3. Have someone co-sign for you
If someone trusts you enough to co-sign on a loan or credit card for you, this may, too, help you rebuild your credit score as long as you make all required payments on time and in full.
While filing for bankruptcy may hurt your credit temporarily, failing to file and falling into deeper debt may create even bigger problems that become increasingly hard to overcome.