If you’ve filed for bankruptcy at some point, you know that it not only affects your finances, but equally does great damages to your credit score. And while it may seem like a daunting task to rebuild your life after bankruptcy – amid working on your credit rating, your finances and emotional wellbeing – there truly is life after all these. Rebuilding credit after bankruptcy is quite possible even eventually attaining a credit score of 700 or 750. How do you make this possible? This article gives you 5 ways to rebuild your credit after a bankruptcy that will undoubtedly help you.
Reviewing your credit report
Your journey to rebuilding credit begins when you know exactly where you stand with your credit and the far you have to go to get to the score you ultimately want. Mark dates to get copies of your credit report from major bureaus. When you know that a credit score above 750 is often considered excellent while one below 400 is considered very poor, you’ll know how drastically you need to restructure your finances to get your desired score.
Creating Realistic Budgets
After a bankruptcy, you’ll need to become extra cautious about your finances. And even if you’ve never created a budget in the past, this is the time you’ll need to do this and be serious about it. Your budget acts as your spending plan that will help you manage your cash flow, in turn, preventing you from getting into unnecessary debts. Budgeting helps to prioritize and leaves room for any debt repayment, savings and bill payment.
Taking care of all your existing bills on time
Make it a priority to take care of all your current bills on time. You can set up automatic bill payments whenever necessary and don’t forget to take care of your rent on time as these payments are often tracked and may play a huge role in your credit score. On-time bill payment is one of the most powerful things that will eventually help restore your credit and finances.
Get a secured credit card
Obtaining a secured credit card is another important strategy for rebuilding your credit score. You can deposit a certain amount on your secured card say $500 and this becomes your credit limit. You’ll gradually be able to rebuild your credit by charging minimal amounts every month and settling your debts on time.
Open a new savings and checking account
Think of opening both a savings and checking account if you don’t have any. Choose a local bank or credit union based on various criteria including talking to friends and family, comparing interest rates and considering the services rendered by each bank.