Tips on Building Credit After Bankruptcy

credit paymentBankruptcy is your legal pathway toward a simplified life when it comes to money. Whether you declare Chapter 7 or 13 bankruptcy, both of these options give you a chance to live out from underneath massive debt. Learn how to build your credit to a better place than before with these tips from our bankruptcy attorney Baldwin County.
1. Start With a Basic Budget
After bankruptcy Mobile AL, it’s important to manage your money with extra care. Begin with a monthly budget. Consider your income, and compare it to your bills and spending habits. The goal is to spend less than you make.
This practice can be difficult at first, but following a budget will help you see where the money is flowing in the first place. Your trusted Alabama bankruptcy lawyer helped you through the legal process, so he or she may have a template budget that works for your needs too.
2. Allocate Funds to Savings
Many people turn to bankruptcy when they overspend, including scenarios involving emergencies. Medical bills, car repairs and countless other items can send credit-card balances soaring. Be sure to prioritize saving after bankruptcy. Create an emergency fund where at least three to six months of income are easily accessed. If you have an emergency, these funds keep you out of severe debt.
3. Prioritize Monthly Bills
One of the simplest ways to rebuild your credit is through solid bill payments. Be sure to pay each bill, from electricity to student loans, on time every month. Use automatic withdrawals to help you with on-time payments. These punctual payments show that you’re a responsible individual. Your history will reflect this fact, which puts you on a good road towards better credit.
4. Consider a Secured Credit Card
A clever way to recover from Mobile Alabama debt consolidation and bankruptcy is by applying for a secured credit card. These products act more like debit cards than credit cards. You add a fixed amount, such as $500, to the card. Use it in the same manner as a credit card until the $500 is spent. The card can’t be used again until you recharge it.
This practice shows that you can handle money, which leads to a better credit score in time.
5. Avoid Living on Credit
Depending on your bankruptcy details, you may or may not have a traditional credit card in your possession. Although you want to rebuild credit, you don’t want to accumulate debt either. Avoid living on credit by paying the balance every month. AL Mobile attorneys may suggest canceling these cards outright until you can get back on your feet. Securing credit is important for your history and score, but the temptation to use the funds right out of bankruptcy may be too tempting. Base your spending on your income level and not the credit-card limit.
6. Improve Your Career
Some people are known for their short-lived careers at various companies. Moving from job to job appears risky to lenders, especially when coupled with a bankruptcy chapter 7 Mobile AL. To rebuild your credit, think about choosing a job or career that you’ll stay with for more than a year or more. This stable practice reflects well on any credit application in the future. If you’re a stable individual at work, that characteristic follows through to your spending habits. Credit scores can rise as a result.
For any questions, please contact Loris Law Firm at Our law firm dedicates our talents to helping everyone with debt relief. Allow our lawyers to form a plan so that you can see better financial days. Bankruptcy is a solid solution for many people in Alabama.