Lose these debt myths when rebuilding your post-bankruptcy credit

On Behalf of | May 15, 2022 | Uncategorized

Now that you have survived your Chapter 7 bankruptcy, you probably plan to rebuild your credit and improve your credit score. If you take the wrong approach to this goal, you could end up in the same situation you were in before your bankruptcy filing.

You can file a Chapter 7 multiple times, but most people want to avoid going through bankruptcy again. It can help to learn as much as possible about debt in general, as can separating debt facts from myth.

Avoid all new debt

Although it is wise to be cautious about accruing financial obligations in the wake of chapter 7, not all debt is bad. For example, if you qualify for a mortgage going forward, they usually have lower interest rates than other types of debt. The impact of a mortgage loan (if you can get one!) on your credit might be less harmful than you thought.

Avoid checking your credit score

You have the right to check up on your credit once a year without harming your score. Further, doing so is wise because you need to know what your credit looks like. An annual credit score check can help you adjust your spending or your budget with the goal of improving your score.

Avoid credit card debt

After a successful Chapter 7 bankruptcy, you need to rebuild your credit. Credit cards issued following bankruptcy have extremely high-interest rates because of your filing. However, if you use a new card frugally and always pay more than the minimum, they can improve your credit and score.

Please, do not be afraid to seek debt relief through another bankruptcy if you face crippling financial hardships on your road to recovery. Before filing a second time, consider learning more about Tennessee Chapter 7 filing regulations.

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