Anyone who has filed for bankruptcy can tell you, life afterward is not very easy. Sure, you are given a fresh start with a lot of your debts forgiven, but you are also left with a lot of repair work to do on your life and especially on your credit, which will take a massive hit during the process. Thankfully, there are plenty of ways that you can help your credit bounce back after bankruptcy. Here 13 ways to improve your credit after bankruptcy.
Make Sure Your Filings Are Accurate
The first thing you need to do after coming out of a bankruptcy filing, you need to pull your credit report in order to make sure that all of your debt is accurately reported on the report and not still hanging around as unpaid debt which will only hurt your credit further down the line. Making sure you get any errors off of your credit report is the first step you need to take.
Keep An Eye On Your Credit Report
Check your credit report often, monthly is best. Keeping an eye on how your credit is doing should now become a habit of yours. This will help you build responsible behaviors and make sure that they are working. You may need to pay a fee to check your credit score more often.
Make Your Payments On Time
Payment history is a big step to improve your credit as it makes up 35 percent of your score. Developing a history of consistent timely payments is an easy way to make sure your credit score is positively improving. Setting up automatic payments through your financial institution is one of the best ways to make sure your bills are being paid on time.
Pass On High-interest Products
Steer clear of the sharks that will circle when you’re done with your bankruptcy. Avoid subprime lenders, title loans, and payday lenders.
Don’t Fall For Credit Repair Scams
While some of these credit repair companies may sound very tempting, a lot of them can be scams. The federal trade commissions have a few guidelines for watching for scam-like behaviors from these companies. Some of these include upfront payment before any work has been done, they don’t tell you your legal rights, they suggest you lie.
Get A Secured Credit Card
This is a proactive measure in order to start rebuilding your credit score. This is a tool that can help your love you’re responsible and reliable.
Secure A Regular Credit Card
When applying for a credit card with bad credit, you need to make sure you read the fine print very well and are aware of all of the fees you will need to pay. This card should be used only for building credit, which means you need to keep a low balance and pay it off in full each month.
Keep A Low Balance
It is important that you do not max out your credit cards because your credit utilization ratio is one of the determining factors in your credit score. This means it can impact your credit even if you are paying your balance down at the end of each month.
Pay Off Balances Close To Their Due Dates
Making your payments on time is an absolute must when rebuilding your credit. But, you do not want to pay the credit off too far in advance, either. It is important that you wait until there is a bill generator before you pay, this way there is a paper trail of you owing money and then paying it back on time.
Increase Your Credit In Stages
Open new accounts slowly and in stages when rebuilding your credit. As you see your credit slowly increasing, you can begin using this history of good payment to increase your options and slowly build more and more good credit.
Start (and follow) A Budget
In a lot of bankruptcy cases, the end result is based on a failure to plan or budget properly. Creating a budget – and sticking with it – is one of the best ways to make sure you do not fall into this cycle of debt again, and can really help you rebuild your credit.
Start An Emergency Savings Fund
One of the things you need to make sure you make room for in your budget is an unexpected financial crisis. A good emergency fund should be able to cover your monthly living expenses for anywhere up to three to six months. Saving is the best way to truly avoid debt relapses.
Be Prepared For Difficulties
It will be very difficult to fully change your life. Turning over a new finically leaf can be extremely hard for a lot of people, but being determined to build new habits, having patience, and willpower is the best way to make your way to a full recovery.
For any questions, concerns, to improve your credit, or to file for bankruptcy and a new start, contact us today.