Can Your Credit Score Ever Recover After Bankruptcy in Texas?

 Posted on November 29, 2023 in Bankruptcy

Filing bankruptcy can be hard on your credit, especially right after filing. Your score will drop in the beginning because of all the discharged debt. Luckily, it is possible to rebuild your credit even after bankruptcy with time and effort. A Texas lawyer can help you determine if it is worth it for your specific situation.

Your Score Will Initially Drop

Expect your credit score to take a big hit after your Texas bankruptcy case is filed. Unpaid debts being discharged and accounts closed will drag down key factors in your score, like payment history and credit utilization ratio. A 100+ point drop is common.

Negative Info Stays on Your Report

Chapter 7 bankruptcy can be reported for 10 years on your credit file. Meanwhile, a Chapter 13 bankruptcy can be reported for 7 years. The bankruptcy status will weigh on your score during this time. Inaccurate information should be disputed with the credit bureaus right away.

Open New Accounts Strategically

About six months after discharge, begin opening new responsible accounts to show you can handle credit again. Start small with a secured card or retailer card. After a full year, apply for an unsecured card. Keep balances low whenever you can.

Maintain a Positive Payment History

Keep all accounts current to rebuild your track record of on-time payments. Pay at least the minimum by the due date each month. Set reminders and automate payments to avoid slip-ups. You can even try to pay before the due date.

Monitor Your Credit Reports

Order free copies of your credit reports annually to ensure no errors or suspicious activity. Dispute any inaccuracies with the bureaus because it can go against your credit score if something is not true, but still, some things should not be. This protects your rights under consumer protection laws.

Consider Secured Debt Carefully

Taking out a secured loan or credit card with money deposited upfront can also demonstrate responsible usage. But secured debt risks losing your deposit if you default. Avoid it unless you are very confident in your ability to repay.

Be Patient and Persistent

Rebuilding credit takes diligence and perseverance. But responsible habits can counterbalance even a bankruptcy in your credit profile over time. Take it one step at a time, and you will get your credit score back in good standing with hard work and dedication.

Contact a Kerrville, TX Bankruptcy Attorney

With strategic effort, you can repair credit after bankruptcy. To figure out if bankruptcy is the best option for you, a Schertz, TX bankruptcy lawyer can help. Call Law Offices of Chance M. McGhee at 210-342-3400 for a free consultation.