Marcus H. Herbert & Associates
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Rebuilding your credit after filing bankruptcy

You may be seriously concerned for your credit after filing for bankruptcy, especially if it comes after divorce or other major life event. The impact will weaken over time. In the meantime, you can start rebuilding your credit immediately.

How will bankruptcy affect your credit score?

Although debt forgiveness can be a relief, it will impact your credit score. It will affect your ability to get a mortgage or get a loan to buy a car for a certain amount of time. However, filing for bankruptcy is a sure way to get your credit back on track.

Bankruptcy will probably knock your FICO credit score into the 500s where over 670 is “good” and 850 is “exceptional.” With a lower score, your interest rate on loans could be as high as 17% compared to 3% at an exceptional score.

How can you rebuild your score?

A financial or legal advisor can provide the most helpful insight into your situation. You’ll need to balance the pros and cons of every option to fit your unique case. Exploring personal finance websites is an excellent way to generate questions for your advisor about your credit.

  • Create a new budget. Only use 30% of your available credit.
  • Create an emergency fund.
  • Pay bills on time.
  • Apply for a secured credit card or co-sign on a credit card.
  • Buy a cheaper car in cash or wait a few years to lower your interest rate.
  • Wait to buy a home until your credit is restored.
  • Balance your free credit report checks between one of three services every four months

These recommendations are a few of the many options available that can help to restore your credit score. Bankruptcy might feel like admitting defeat. However, it can be a trampoline you use to bounce back from severe debt. Taking small steps today can help rebuild your credit tomorrow.

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Marcus H. Herbert & Associates
416 S 5th St
Paducah, KY 42003-1530

Toll Free: 866-702-8933
Phone: 270-908-0552
Fax: 270-443-6345
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