Restore Your Post Bankruptcy Credit with the Following Ways
[Author’s Bio: Sidney loves to write financial articles and she is a contributory writer associated with Oak View Law Group and has written several articles on debt consolidation, debt relief, debt settlement, bill consolidation and get out of debt for various financial websites. She holds her expertise in the Debt industry and has made significant contribution through her various articles.]
Restore Your Post Bankruptcy Credit with the Following Ways
If you are on the verge of bankruptcy and feeling concerned about your credit score, then you have enough reasons to worry. Bankruptcy gives you a financial fresh start but is a deathblow to your credit scores and mess up your credit completely. Generally, bankruptcy lingers on your credit report for up to 10 years and you are not allowed to file for it for another 6 years. As the three digits number of your credit score which ultimately shows your creditworthiness get potentially lower in bankruptcy, the doors of availing future credit remain almost closed. However, there are ways to deal with post bankruptcy credit and rebuild your credit score once again. If you have a fighting spirit and a strong urge to bounce back, read the following points and get your credit score back on track.
- Your first and foremost duty is to wait patiently till your debts are fully discharged in bankruptcy and you are able to build back your credit. With a blemished credit history it is quite difficult to apply for a credit card or any other unsecured loan. If you can arrange for collateral, it is better for you to go for a secured loan. Prepaid credit card can be your viable option as well. The prepaid credit card is more like a gift card or debit card where you put a certain amount and draw money against it and can load the card up again according to your convenience.
- Go slow before taking on new credit cards. Store credit cards from a hardware store, department store or furniture company are comparatively easier to obtain after bankruptcy. If you want, you can use several of them but make sure you pay the balance in full every month. Never, ever use more than 40% of the credit limit on any of these cards or any other revolving loan.
- Consider obtaining installment loans like car loans, in store credit for a large appliance, tires from a tire shop as paying them on time will help you to improve your credit history. You should try to pay the installment loans off in full as quickly as possible.
- Create a budget and stick to it. Decipher the difference between wants and needs and don’t buy anything you can’t afford. Determine how much you can exactly afford to spend monthly on your new line of credit without being late ever. Be cautious and do not fall in the same credit traps once again.
To conclude, filing bankruptcy has some adverse consequences and damages your credit report for years to come but it teaches few lifetime lessons as well. You must learn how to maintain your finances in difficult times and avoid your old credit traps that cause the bankruptcy.