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How to rebuild your credit after a financial hardship

Updated: Jan 29, 2022

Families in all income categories have experienced hardships from job loss, reduction in income, business failures, illness, divorce and foreclosure. When all of these hardships are analyzed they all point to one common fact and that is damaged credit and low or decreased credit scores. Below are 7 easy ways to rebuild your credit.

If you have suffered a hardship and desire to rebuild your credit here are a few things you may want to consider.

1. If you are currently unemployed and you are facing foreclosure, in order to protect the remaining credit you have, you definitely need to understand the steps regarding a short sale instead of a foreclosure. A short sale is less impactful to your credit unlike a foreclosure.

2. If you have lost your home to foreclosure and if you filed bankruptcy, please understand that you will not be able to buy a home until after the bankruptcy has been discharged for 3 years.

3. If you filed bankruptcy and did not own a home, you can purchase a home 2 years after a Chapter 7 bankruptcy has been discharged, provided that your credit score is a 620 or higher.

4. If you have unpaid medical bills, late credit cards payment, you are unemployed and you are late on your mortgage, you may want to consult a bankruptcy attorney or a consumer credit counselor for advice on how to stabilize your finances.

5. If you are unsure about your credit situation, always begin with obtaining a copy of your credit report. Be informed about what is in your credit file.

6. Usually after a bankruptcy, your credit score will begin to increase after 6-12 months if you do not allow any additional negative activity to enter your credit file.

7. Using credit cards to rebuild your credit and to increase your credit scores after bankruptcy can be very beneficial. Understand the steps that are involved by doing your homework.

After a financial hardship, it will take you 2-3 years to rebuild your credit. The process is easier than you think.

Real Estate Consultant, Lisa W. Jefferson is a Georgia Real Estate Broker/Owner with 23 years of experience under her belt. She is "blessed to be a blessing" and dedicated to helping her community and her clients stay educated about home buying, home selling, and investing. For more about Atlanta Homebuyers Realty Group, visit our office located at 4319 Covington Highway, Ste 307 Decatur, Georgia 30035 or call for a free consultation today. Office: 678-824-4817 or Direct: 678-480-5054 email:

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