How to Rebuild Your Credit After Rehab
Trying to rebuild your credit after rehab can seem like a daunting task. While it will take some time, you can start almost immediately.
Once you’re out of Rehab, if you’re smart, you’ve continued your addiction treatment in an outpatient facility such as a sober living home. In these homes, you will be continuing your addiction treatment with “Aftercare” – the care that come after Rehab.
At some point during your residency, you will be able to return to work in some form, even if it’s part time work. Sober living homes (like The District) offer job placement support by working with a select group of local companies here in Southern California. Each of these companies have expressed a willingness to work with our residents to help give them a fresh start.
It’s at this point that the process of rebuilding your credit can begin. There are some steps you should take to get the ball rolling:
1) Contact your creditors by phone and see if you can work out a payment plan. Even if it’s just getting them to lower their interest rate and accept smaller monthly payments, it’s a start.
2) Take $250 of your earnings and open a “secured” credit card. Essentially, you’ll be given a $250 limit (to match your deposit) and you can charge goods or services against that $250 spending limit. Be sure to pay on time every month.
3) Sign up for a free credit monitoring service like www.creditkarma.com. This service allows you to watch your credit score improve in real-time.
4) If you’re in deep debt, $10,000 or more, go for a free consultation with a bankruptcy attorney. The attorney will let you know your options and will counsel you as to your best course of action. In most cases, you’ll never have to appear in court.
5) If you file a bankruptcy, understand that everything you buy on credit will cost you more because your interest rates will be higher. Fortunately, rates start to drop quickly as you earn more money and as you build a history of on-time payments. Making your payments on time for the next five years is a crucial step to rebuilding your credit. A general rule of thumb is to never use more than 10-20% of your account’s credit limit.
Following these steps will put you on the path to a good credit score in just a few years. In addition, it’s a good idea to focus on advancing your skills or eductation while you’re going through recovery. Wherever practical, it’s wise to pursue further job training or moving forward with your education, even if it’s just 1-2 classes a semester. All steps, even small steps, toward your goal will make a huge difference.
You can review even further tips from one of the nation’s leading credit rating bureaus here.
In a changing job market, fortune favors the experts. Whatever field you choose, pursue it with great vigor and ambition. Remember that investing a few years of your life on training and/or education will pay big benefits in the form of bigger paychecks for the rest of your life.
Time is On Your Side
You may think that taking 3-5 years to build a great score is a long time, but think about how much time you spent wrapped up in addiction. For some people, they were trapped in addiction for many years and in some case, decades.
Once you’re on the path to recovery, investing this time is in your best interests and the result will pay dividends for the rest of your life. Think about doctors – they often invest ten years or more of their lives in getting their edcuation. Tradesmen spend many years learning their trade. In today’s global economy, the process of building a better future for yourself requires only one thing: your belief that you can do it. If you’ve conquered addiction, you can do anything.
If you’d like to learn more about our job placement services for our sober living home residences, call us now.