Repairing your credit score is the primary concern of a consumer who has filed for bankruptcy. There is an unfair stigma attached to bankruptcy which contributes to the feeling of people having reached “rock bottom” financially. There is no need to despair and feel hopeless post-bankruptcy, as you can start to make real positive changes to improve your financial future.
A fresh start
You should try to view your post-bankruptcy filing status as the opportunity to have a new beginning financially. Devising a new credit repair plan will help you to remain optimistic and focus on how you can turn the situation around for the better. Your fiscal confidence will improve and you will start to feel more in control of your monetary matters once again.
Follow these top tips to get on the well to applying for credit again and rebuilding your score:
Tip 1: Make a budget
In order to move on from bankruptcy, you need to start to create positive spending and savings habits in order to not fall into the same bad habits that corresponded to your pre-bankruptcy indebtedness. Start by making a budget that has you realistically and sensibly living without your means. By reassessing your finances in a thorough and frank manner, you will know what you can and cannot afford. It is important to use a spreadsheet and calculate your income expenditures to the nickel – don’t over or underestimate or round down figures as this won’t help you stick to the budget.
TIP 2: Prioritize your bill repayments
Remember that your first priority when you get paid is to cover your bills. This is because every single utility bill, mobile phone contract, cable plan or bill in your name contributes to your credit score, for better or worse. Do not make a late bill payment as this sends the wrong message to prospective lenders. Remember that after bankruptcy, your bill payment history becomes the most important indicator of your creditworthiness – keep it pristine and you will soon see the benefit to your credit score as positive reporting follows each timely bill payment.
TIP 3: Go for “soft” credit
Applying for a store credit card is a good way to slowly and softly edge your way back into the world of credit. Although most credit card companies will not approve a consumer who has filed for bankruptcy, a large number of retail stores have a more flexible approach. This is because store cards have lower limits and a more narrow purpose (typically only valid in certain stores), so their capacity for overuse is curtailed. You should use your store card responsibly, using it for small transactions each month and repaying the full amount promptly each time. This will give your credit score a much needed boost and will establish the good credit history that you need.
TIP 4: Keep a close eye on your credit report
Monitoring your credit report post-bankruptcy is an important way to ensure that no mistakes are recorded that can undo all of your hard work in rebuilding your credit history. Get in touch with the credit bureaus if you notice anomalies.
It takes time to rebuild your credit profile after you have filed for bankruptcy, but if you follow these tips and start taking action immediately, you will start to see the changes for the better.
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