Filing for bankruptcy is a difficult decision to make for most individuals. Not only do you have to think about what this means for your assets and finances now, you also have to consider how it might impact your future. Moving on after you file can be challenging.
One of the most difficult things to do after you’ve had to go through bankruptcy is to rebuild your credit. In the interim, you will have to learn to live without having to rely on anything but you own income. Ultimately, this part of the journey can help because you might be better prepared to use credit when you are able to obtain it again. Here are some tips to rebuild your credit after bankruptcy:
You can’t try to rush improvements to your credit. For one thing, the number of credit applications you have at any given time will impact your credit score. Companies with grant credit might be wary of providing any new lines to a person who has several requests for credit on the credit file because this tends to look like a move based on desperation.
Start with secured credit
When you start on the path to getting new credit, you might have to get secured cards. This can build your credit while having the security of knowing that the funds to cover purchases have been paid in advance. This can also open you up to the possibility of moving to unsecured credit in the future.
Pay other debts on time
Make sure that you pay all your bills on time. Even if you don’t think that they will be reported to the credit bureaus, you should still pay the bills on time. You never know when you will need to use a company as a reference for your paying bills on time.
Keep balances reigned in
In an ideal world, you will only charge what you can pay off at the end of the month. Not only will this help to keep your balances manageable, it also shows that you aren’t trying to rely heavily on credit to keep up with your current lifestyle. Of course, some purchases, such as homes and vehicles, will require that you have an ongoing balance. Just make sure that you are able to afford the payments comfortably.