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Establishing credit after bankruptcy

Bouncing back from bankruptcy isn't going to happen right away. You will have to work hard to get things set up so you can enjoy having a solid credit history. This doesn't mean that is going to be impossible, but you should be prepared for it to take time.

One of the most important things for you to remember as you rebuild your credit is that you need to use your resources carefully. Try not to rely on credit accounts. Instead, use them here and there for smaller purchases. This will help you to build up a positive payment history that can make your life easier in the future.

Check your credit reports

Your bankruptcy is going to show on your credit report. Double check to ensure that you don't have any accounts listed as still being actively collected that were covered by the bankruptcy. You also have to look for accounts that aren't yours. If you see any errors in your credit report, contact the credit reporting agency to dispute the erroneous entries. While you are reviewing it for errors, check your credit score so you know your starting point.

Consider secured credit options

You might need to turn to a secured card to build your credit. Even though you have to put a deposit down to open the card, you still need to make the payments on time and watch how much credit you are using. Make sure that the company you are working with is reputable and that they will report your payments and history to the credit bureaus.

Set your budget

Your budget lets you know how much money you have available for payments on credit accounts. Don't make any purchases using credit unless you know that you can comfortably make the payments. Add the payment into the budget and see where it will leave you.

Make your payments on time

All your payments must be made on time each month. Even one missed or late payment can have a negative impact on your credit report. Plan ahead if you are going to mail payments to the company. Delays in the mail service might happen and you don't want this since it will impact your credit.

Even though bankruptcy is a difficult circumstance, you have to think about your future. The work you put into your finances now will help you to be able to get credit for the things you need later, such as a vehicle or a home.

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