Many people who file bankruptcy worry about their credit scores and the possibility of obtaining a credit card in the future, or they declare that consumer debt is the last thing they want to deal with again. Both sentiments are understandable, but the latter one can be a mistake for a number of reasons:
- Rebuilding credit is important after bankruptcy even for non-consumer credit loans. For instance, good credit helps for other loans such as mortgages and automobiles.
- Using a credit card to rebuild credit rather than supplement income are two different things. Many cardholders run into trouble by using the card as a crutch when income is too low. The obvious solution is to either spend less or earn more. Fewer and fewer Americans can snap their fingers to earn more than in the past, but it’s often possible to reduce expenditures such as restaurant meals.
- It’s possible for even the most credit card averse to find a way to strategically use the card. For example, some households use a credit card solely for bills paid over the Internet. The benefit is usually to prevent identity theft, which frequently occurs in person, such as by a restaurant worker stealing the numbers. However, those who want to strategically rebuild credit can use a credit card in the same way—just to pay bills. Setting a recurring alarm in a cell phone as a reminder is a good way to ensure that the bill is paid on time.
- Creditworthiness is useful for other purposes. For example landlords often ask for credit reports, and employers are increasingly looking into their job applicants’ creditworthiness as well. It’s unfair outside of some obvious situations, like working at a jewelry store, but it’s a reason to ensure that you appear creditworthy. Insurers sometimes care about credit scores as well.
Credit scores aren’t the be-all-end-all of your ability to function in society post-bankruptcy, but it should be neither over-valued nor ignored.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Haines & Krieger Las Vegas bankruptcy attorney for a free initial consultation. Call us at 1-702-880-5554 to set up your free consultation.