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Rebuild your credit carefully after a bankruptcy

Consumers who have gone through a bankruptcy are eager to reclaim the solid financial footing they once enjoyed. While it does take a little bit of time to rebuild your credit after filing for bankruptcy, it doesn't take as long as some might think.

It's not that difficult either, as long as responsible fiscal management is part of your new skill set. But there are a few instances where consumers can get tripped up and fall back into dangerous debt patterns. One of those is overlooking past bills.

Perhaps it was an old cable bill that didn't get included in your bankruptcy discharge. It could be so old that you don't even recall the debt, and if so you can ask for proof of your indebtedness, but if it is a valid debt, it can mar your new credit profile.

Your bill payment history is the basis of 35 percent of your credit score, so allowing a small sum to be sent to collections is foolish, one financial professional says. Lenders are less concerned with the amount of your debts than with your intention and ability to repay them.

Keep in mind that revolving credit accounts that are late by as little as a month can affect your credit score by as many as 80 points — a huge hit for somebody coming out from under a bankruptcy proceeding.

You also need to consider how credit utilization can lower your score. This means that if rack up a lot of debt and have little available credit, that's another ding to your credit score.

Delinquencies matter, too. Don't allow bills to languish unpaid. If you have the money, pay it down promptly. Automatic bill payments are great for the absentminded among us. Keep abreast of your credit situation by regularly obtaining your free credit reports and checking for outstanding accounts that slipped your mind.

If you have questions about the debts discharged in your bankruptcy, ask your attorney to clarify whether or not you owe it.

Source: bankrate.com, "Forgotten bills can kill your credit score," Karen Haywood Queen, accessed Aug. 12, 2016

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At the law offices of William H. Oliver, Jr. & Associates in Toms River and Lakewood, New Jersey, we represent clients in Toms River, Neptune, Trenton, Middletown, Red Bank, Wall, Lakewood, Lakehurst, Manchester, Asbury Park, Old Bridge, Jamesburg, Barnegat, Forked River, Manahawkin, Ocean Township, Brick, Manasquan, Howell, Freehold, Hazlet, Bradley Beach, Brown Mills, Long Branch, Keansburg, Marlboro, Bayville, Beachwood, Whiting, Sayreville, South River, East Brunswick, Monmouth County, Ocean County, Middlesex County, Burlington County and Mercer County.