5 Ways to Rebuild Credit After Filing for Bankruptcy

Have you been thinking about filing for bankruptcy? For some consumers, bankruptcy provides a way to start fresh; however, it’s important to understand that rebuilding your credit can take time.

When you choose to file for bankruptcy, you may feel relieved. After months or years of struggling with unbearable debt, bankruptcy can offer incredible relief. After you decide to file for bankruptcy, it can take several months to complete the process. Once your bankruptcy is complete, you may wonder how you can start moving forward and avoid falling into debt once more. The most important thing you can do is to start focusing on rebuilding your credit. There are several things you need to know about rebuilding credit after bankruptcy.

1. Create a budget.

Perhaps the most important thing you can do after filing for bankruptcy is to create a realistic budget you can stick with. Your budget should include all your bills, including your rent, utilities, and food costs. When you follow a budget, you can ensure that your spending remains within your designated limits and that you don’t accidentally overspend.

2. Focus on making timely payments.

Always focus on paying your bills on time. Punctual payment is very important when it comes to improving your credit score. Consider making a schedule or utilizing an app that can help you remember exactly when each bill is due. This can help ensure that you don’t miss a payment deadline. Remember that paying a bill late not only affects your credit score, but can result in accumulating fines, as well.

3. Get a secured credit card.

Secured credit cards are a powerful tool for rebuilding credit. Use the card sparingly, making only a few small purchases a month and paying the balance off in full, before the due date. With a secured credit card, you deposit with the lender an amount equal or nearly equal to the maximum credit line on the card. Unlike with a debit card, your payment history for a secured card is reported to the credit reporting agencies.

4. Pay off balances monthly.

When you do choose to utilize a secured credit card or a store credit card, make sure you pay off the balance each month. This is very important, as it will prevent you from accumulating a large amount of debt that you cannot pay.

5. Check your credit report.

Make sure you check your credit report regularly to make sure that your score is correct. After you file for bankruptcy, you’ll need to make sure that negotiated accounts are reported to each credit agency. Your credit score will change once your bankruptcy is complete, so check back on a regular basis to ensure that your score looks correct. If you notice there is a mistake or that something has been reported incorrectly, you can speak with the lenders and the credit reporting agency for more assistance in correcting your score.

If you’ve been drowning in debt and you’re ready to start moving forward with your life, filing for bankruptcy could be the right choice. Talk with your attorney about your personal situation and find out if bankruptcy is right for you. Call today to schedule a free consultation.