While filing for bankruptcy should be considered an option of last resort, it is necessary for some situations. If you are faced with filing bankruptcy, you shouldn’t feel as though this is the end of your financial wellness. You can rebuild a good credit profile even through the seven to 10 years that the bankruptcy will remain on your credit report. Here are a few tips you should follow in recovering from your bankruptcy.
Review Your Credit Report
Once your bankruptcy has been finalized, you should request a free copy of your credit report from each of the three major reporting agencies. The reports should be reviewed and compared to one another to identify discrepancies. In particular, look for debts that should have been discharged through bankruptcy. You should also report any other errors that you find to the credit bureau that issued the report.
Start Paying Your Bills on Time
It is essential to your credit profile that you pay every bill on time each month. Even a late payment to a utility company can result in a negative impact on your credit rating, so be sure to make your payments a few days early. Establishing a good repayment history will help your credit score improve sooner, and it will show lenders that you’re taking your financial responsibilities more seriously.
Get a Secured Credit Card
You can help rebuild a better credit score faster by obtaining a secured credit card. This is a credit card that’s linked to a checking account. You’ll be required to deposit a predetermined amount that will serve as your credit limit. Typically, the amount is $200, but you can apply to increase the amount as you establish a good repayment history. Depending on how much you use the card, you may start to see an increase in your credit score in as little as a few months.
Finally, it’s important to avoid giving in to your desperation. While you may be eager to rebuild your credit profile, try to make wise and well-researched decisions. Avoid businesses that promise to help you rebuild your credit faster. This is a process that takes time, and any company that’s promising a quick fix is probably just trying to take advantage of you.