One of the most difficult things about bankruptcy is the time that comes right after the process itself is completed. As much as it can be a relief to be out of debt so that you can get on with the rest of your life, it is also the start of an immense new challenge: credit repair.
In addition, even though millions of Americans have had to file for bankruptcy in recent years, there is still a stigma surrounding it. This often keeps people from consulting with their friends and associates on the best methods they can use going forward as they try to rebuild their credit. That means that the challenges ahead are even tougher than they have to be.
There are many things that you can do after a bankruptcy proceeding to speed things along a little bit as you try to build your credit score back up. One of the first is to make sure that the debts on your credit reports are noted as part of a bankruptcy settlement, so that they do not show up as current debt. While going through bankruptcy obviously hurts your credit, it’ll be even worse if some of that debt is still showing up on your report.
Next, you should focus in on setting a budget and following it. While tough economic times can make it impossible to avoid debt problems, once you come through bankruptcy, you really need to focus on making sure it never happens again. Setting and keeping a budget is a good way to do that.
Once you’re comfortable with that, it is time to try to get another credit card. Having an active credit history is critical to your credit score, and you need to demonstrate that you are capable of being responsible with a credit card. You may need to start with a secured credit card, but no matter what it takes, it is worthwhile. Check out my Credit Card Reviews section to find a number of great secured credit cards.
Make sure you don’t miss any payments on your new credit card. If possible, consider setting up automatic bill payment to ensure that you are not late on any of your payments, as that would damage your score significantly. Likewise, if you have any loans that were not discharged during the proceedings, make sure you keep making payments promptly. One such example would be a student loan.
Lastly, try to keep your credit card balances low until your scores have been repaired. It’s important to maintain the right credit-to-debt ratios, and you can learn more about credit utilization by reading my article Utilization: Maintaining The Right Credit Balance to Limit Ratio.