Rebuilding Your Credit After Bankruptcy

There is a nasty myth about bankruptcy that stops many debtors from seeking much needed relief. The myth states that once you file bankruptcy your credit is ruined for life. This is completely and dangerously false. After filing for bankruptcy most former debtors are eventually able to restore their good credit standing and go on to purchase homes, vehicles and obtain unsecured credit. Here are some steps you can take to build your credit after filing bankruptcy:

Step 1: After filing bankruptcy, keep a budget and make an effort to pay ALL of your bills (ie rent, utilities etc.) on time.

Step 2: After your bankruptcy discharge, make sure that you create an emergency savings stash equal to at least 3 months worth of expenses. This will come in handy for unexpected emergencies.

Step 3: After your bankruptcy discharge, apply for a secured credit card to begin rebuilding your credit score. Make sure you deal with a credit card company that reports your payment history to the credit bureaus and make sure you pay on time.

Step 4: After obtaining a secured credit card and paying faithfully for a few months, apply for a secured line of credit. This can usually be obtained at stores for home goods, electronics, and other items.

After a year of on time credit card payments you should be able to obtain a car loan and within two years a mortgage for a home.

By | 2018-01-18T08:43:25+00:00 August 3rd, 2009|Credit Counseling|Comments Off on Rebuilding Your Credit After Bankruptcy