If you have just come out of a bankruptcy, your credit is likely to be in shambles. It is possible that your credit score dropped by 100 points or more, and you also have to deal with that bankruptcy staying on your credit report for up to 10 years. Fortunately, there are steps that you can take to start immediately overcoming the credit impact a bankruptcy may have. If you can’t or don’t want to do these on your own then consider talking to some credit repair companies to get some advice or professional help.
Continue to Pay Down Your Debt
Just because you filed for bankruptcy doesn’t mean that all of your debts will go away. In some cases, you may choose to keep paying a car or student loan balance either because you want to keep the car or because you can’t discharge it in bankruptcy. By continuing to pay down your remaining debt balances, you will work toward building a positive credit history. In most cases, the effects of a bankruptcy start to diminish or go away entirely after a year or two.
Apply for a Secured Credit Card
Typically, a credit card is an unsecured loan reserved for those with good credit. However, those with poor credit may be able to get a line of credit that is secured by an initial deposit. Generally, the amount of your deposit is the amount of credit that you will have access to. The card issuer will report your payments to credit bureaus, and the card may convert from secured to unsecured after several timely payments.
Check Your Credit Report for Errors
Once a debt has been discharged, it should no longer remain on your credit report except to clarify that the account has been closed. You should also check for duplicate entries or other inaccurate information that may be visible to lenders or others making a decision based on your credit score. If there are errors on your credit report, you should contact the lender or the credit bureau directly.
Talk to a Financial Adviser
A financial adviser may be able to help you create and stick to a budget. By sticking to a budget, you are unlikely to spend money that you don’t have, which may reduce the odds that you have to use loans to finance your lifestyle. Financial advisers may also help you devise strategies to help you save for retirement or take other steps to improve your financial security going forward.
Filing for bankruptcy is not something that should be done lightly. However, if you do decide to file, make sure that you have a plan to repair your credit as soon as possible. By continuing to pay down debt, checking your credit report for errors and talking with a financial professional, it may be possible to move on from bankruptcy in a timely manner.