Those who were forced to declare bankruptcy may find that their immediate debt problems are over. However, with bankruptcy comes the slow and steady climb back to good credit scores. Your credit score is going to be complete garbage after bankruptcy. It can make financing vehicles difficult, getting a loan for a home almost impossible, and you might even be unable to take out another credit card. You have to be able to prove to those financial institutions that you are reliable. To do that, this article will offer you a few tips on how to recover after a bankruptcy.
1. Check Your Credit File
One of the first tasks that you need to complete after the bankruptcy has been finalized, is your credit file. Your lawyer will handle all of the legal aspects of bankruptcy, but they typically won’t check the credit file to ensure an error wasn’t made. That falls to you. You can receive a free credit file through certain institutions. Check over the details and ensure that every debt has been accounted for. You don’t want creditors and debtors giving you a call when the problem is supposed to have been handled.
2. Make Payments On Time
The next task that you need to focus on is repairing your credit score. The simplest and best way to do that is to start making payments. Your payments should be on time. It’s also a good idea to try and pay a bit more than you owe if you’re able to. This shows the banks and lenders that you are able to pay off the debts that you accrue. Besides just bills that are tied to any remaining credit cards that you have, it’s also wise to pay off regular bills. While these may not necessarily show up on your credit report, if you fall behind and those items are added into collections, then it will show up on your credit report.
3. Get Secured Credit Card
Your next task to repair your credit score is to take out a credit card. You’ll likely find it difficult to qualify for one. An option that might work for you is to take out a secured credit card. This is a card where you put down a certain amount of money to act as reimbursement in the event that you can’t pay the card off. With the card, you can then start making small purchases and pay them off when the bill becomes due.
4. Take Out A Loan
One of the most difficult tasks you’ll have is getting a loan after bankruptcy. However, it’s something that you should strive to do because it looks great on your credit report when you can pay those loans off. Make sure that the loan fits with your budget, however, so you don’t end up taking on more than you can chew. Car loans can be a great option. The prices are sometimes affordable each month and they can be a bit easier to obtain than other types of loans. Otherwise, look for banks and credit unions that offer special loans for those with bad credit. Try to avoid the ones that have high-interest rates, however.
5. Start Saving
Finally, you should start putting money into an emergency fund. By placing a strict budget for yourself, building up an emergency fund is possible. This rainy day fund can be yours to draw from in the event of an injury, death, house repair, or any other problem that suddenly arises and threatens your finances.