How To Rebuild Credit After Substance Abuse Has Left You Financially Ruined

Rebuild Credit After Substance Abuse - Addiction Hope

Contributed by RiverWoods Behavioral Health System clinical content team member Kathryn Taylor, MA, LPC/MHSP.

The decision to clean up your finances and rebuild credit after substance abuse is a positive step. Financial debt and financial problems may seem like a dark cloud that you would like to avoid, but progressively diminishing the shadow that it casts on your financial opportunities will give you a sense of accomplishment and add a measure of relief to your healthier, new lifestyle.

If addiction led to financial strain or brought about a poor credit score, improving that score might be an essential element of your financial recovery. If you are simply afraid to check your credit score, rest assured that doing so can be a great starting point.

Basically, climbing out of a bad credit score requires adhering to a few simple principles:

  • Do not apply for unnecessary credit cards.
  • Pay your bills on time.
  • Pay off your debt rather than moving it to another carrier.
  • Keep your balances low.

Following these steps will, over time, grant you greater ability to qualify for bank loans, purchase a new home or vehicle, or even meet the requirements for applying for certain jobs.

Getting a full report on your credit score is pretty easy. Contact Experian, TransUnion and Equifax and compare the reports for any differences. Many online credit report services that have been approved by the Federal Trade Commission (FTC) are also accurate and user-friendly. [1]

Every year, you can get a free copy of your credit report. This report will help you determine if your rating is becoming worse or better.

Which Debts To Pay First To Rebuild Credit After Substance Abuse?

Take note of every line of credit that is open in your name. For every credit line that exists, you will need to follow the following basic steps:

  • Find the credit card balance.
  • Divide the balance owed by the credit limit (the amount you are allowed to charge).
  • Multiply the answer by 100.

The answer that you will get by following the above steps will reveal the answer to your utilization ratio. High utilization rates usually mean a worse credit score. If some lines of credit have very high interest rates, you should focus on paying them off first. However, if the interest rates are about the same, and you find that some lines of credit have a high utilization ratio, you might want to take a smart step and work toward paying them off first.

Doing the above calculations on your credit lines might lead to surprising results. If you are paying your bills on time, you might assume that your credit score is good. However, if you find that there are high utilization ratios, your score may be lower than you expected.

What Kind Of New Credit Card Should You Try To Open?

If you would like to open a new credit line to help re-establish your credit, search your bank and other banks for the option of secured credit cards. As long as the card issuer is connected to the major credit bureaus, your stable payments on this card will improve your credit score. However, be aware that this type of card will require a cash collateral deposit when you first obtain it.

Do not miss payments! Set notifications to remind you to pay the bills, or set up auto-pay options if you can.

If you do miss a payment, do not lose hope or give in to undue anxiety and stress. You can continue to climb out of your bad financial history. Contact the card company and ask to push back the due date. Do not resort to borrowing money to pay off debt, as this can quickly compound your debt problems.

Staying Patient And Resolute To Rebuild Credit After Substance Abuse

Rebuilding credit is not a quick process. Credit reports can go back for seven years. Improvements will show over time, though. When the understanding is there that you have recovered from substance abuse disorder, some leeway may be possible for certain applications.

Keep monitoring your scores. If you must file for bankruptcy to get out of debt and this negatively impacts your score, do not be disheartened. Getting clean from drugs is a difficult effort, but we all know that recovery is possible. That includes recovery from the financial symptoms of addiction.


[1]: Credit Reports and Scores. (n.d.).

About the Author:

This blog was written by RiverWoods Behavioral Health System clinical team member Kathryn Taylor, MA, LPC/MHSP. Kathryn has several years of experience working in dual diagnosis addiction treatment, women’s issues and trauma treatment as a licensed mental health counselor.

Site Description:

Riverwoods Behavioral Health is a leader in providing a comprehensive continuum of psychiatric, substance abuse, and behavioral healthcare services for children, adolescents, older adults, and seniors in Texarkana and its surrounding communities. Riverview offers specialized programming designed to meet the sensitive needs of adolescents who are struggling to move past the challenges that they face at this point in their lives and grow to meet their full potential. Devoted to providing a safe and nurturing environment for adolescents as they overcome their addiction to drugs, Riverwoods Behavioral Health makes it their sole mission to help patients discover the strength that lies within them while developing the tools needed to move forward towards a happy, healthy, and sober future.

The opinions and views of our guest contributors are shared to provide a broad perspective of addictions. These are not necessarily the views of Addiction Hope, but an effort to offer a discussion of various issues by different concerned individuals.

We at Addiction Hope understand that addictions result from multiple physical, emotional, environmental, and genetic factors. If you or a loved one are suffering from an addiction, please know that there is hope for you, and seek immediate professional help.

Published on June 15, 2016
Reviewed and Updated by Jacquelyn Ekern, MS, LPC on January 6, 2021
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Baxter Ekern is the Vice President of Ekern Enterprises, Inc. He contributed and helped write a major portion of Addiction Hope and is responsible for the operations of the website.