By:Michael A. Cibik
I have always referred to bankruptcy as a tool in the toolbox. In other words, bankruptcy is but one step toward fixing your financial troubles. You must also think in terms of life after bankruptcy, and rebuilding your credit will help to stabilize your financial future. However, by the time the bankruptcy is completed, debtors are so fed up with credit and debt issues that they wait forever to re-establish their credit.
The first thing to do is pull your credit report. You’re entitled to one free copy of your credit report every 12 months from each of the three nationwide credit reporting companies. Order online from “annualcreditreport.com” the only authorized website for free credit reports, or call 1-877-322-8228. You will need to provide your name, address, social security number, and date of birth to verify your identity.
The next step to re-establishing credit is getting one or two, credit card(s), and use them responsibly. Make minimal charges and pay off the balance in full every month. Even if you have to pay a security deposit for a card, it will help you establish a pattern of fiscal responsibility. The more you do this, the higher your FICO score will rise.
Request limit increases every six months on the card(s). Since an increase in your credit limit is a sign that your bank trusts you to repay the debt, your credit score will rise even further. Remember, bankruptcy doesn’t signify the end of your credit. Rather, it is the first step to rebuilding poor credit.
Michael A. Cibik is a partner at the Philadelphia law firm of Cibik & Cataldo, P.C. He is one of the few attorneys in the Philadelphia area certified by the American Bankruptcy Board.
If you or someone you know is having financial problems, stop worrying and call Michael at (215) 735-1060 for a free consultation.
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