What NOT To Do After Bankruptcy:
- Carry a Balance: Hopefully, this time around, you can avoid carrying a balance on your credit cards and other lines of credit. Don’t listen to anyone that says you improve your credit score by carrying a balance. They’re wrong! The best way to “use” credit to improve your credit score is to use the card and pay it off in full every month (or within a few months). This improves your credit score sooner and shows lenders that you have re-established good credit behavior.
- Assume Lenders Will Stay On Top Of Your Credit Report: Always double check to make sure that your lenders are accurately reporting your credit limits on all accounts, whether they are secured or unsecured. Open credit is the best thing you can do for your credit score. So make sure all your open credit is reporting at all times.
- Assume Credit Cards Are Your Only Option: You may have the opportunity to apply for loans immediately after receiving your bankruptcy discharge. This procedure will be similar to that of applying for a secured or unsecured credit card.
- Dismiss Retail and Gas Cards or Credit Accounts: While this isn’t as easy as it was in years past, don’t dismiss the option of obtaining retail or gas cards as a means of restoring your credit to its previous prestige. You might find that you need to begin to reestablish your credit first before you can be approved for retail credit or gas cards, but consider options offered by department stores, retail outlets, hardware stores, office supply stores, appliance and electronics stores, gas stations, etc. When you’re attempting to rebuild your credit post-bankruptcy is no time to get picky about what you consider appropriate credit.
Quick Tip: Remember, when you’re considering retail or gas credit accounts, many of these companies utilize the same major lenders to process their credit card transactions: Citibank, GE Money Bank, Chase Bank, HSBC, Synchrony, WFNNB, etc. These major institutions handle the vast majority of consumer stores. You could already be in the system and applying for a new card could flag your former, delinquent account. This will result in an inquiry on your credit report and a credit line denial. This is not a desirable combination of events. Avoid it if possible.
If you need additional information about filing for bankruptcy or if you have questions about the recovery process after bankruptcy, please get in touch with an experienced southern California bankruptcy attorney from Westgate Law today.