Top Ways To Build And Improve Your Credit After Bankruptcy
While you will face consequences if filing for bankruptcy, including a hit to your credit score, it is not that hard to improve your credit after filing. In fact, with the right steps, your credit could be better than it was before you filed for bankruptcy within just six months to one year. Improving your credit will require some work, though, and here are four of the top ways you can accomplish this.
Use the principles of budgeting you learned from credit counseling
The first thing is to apply the principles of budgeting that you learned while taking the two required credit counseling courses. These courses will teach you so many things about budgeting, managing money, and finances. If you can apply these principles to your finances, you will avoid racking up new debt, and you might be able to better protect your credit score.
Start with a secured credit card
Secondly, you should aim to get a secured credit card. This type of credit card will require paying a deposit in exchange for a credit line. The deposit you make is placed in a bank account, and you receive a credit card you can use. If you do this, you should use the credit card each month and pay the total balance off in full. As you do this for several months, it will rebuild your payment history, which makes up a good portion of your credit score.
Take out a personal loan
Another good step to take is applying for a personal loan, even if you do not actually spend the money you receive from the proceeds. The point of this is to help rebuild your repayment history by having an installment loan. If you decide to go this route, you must make your payments on time, though. If you do not, it will only harm your credit.
Get a credit report and work on disputing anything you can
Finally, it is vital to obtain a credit report to find out what is on it. After you receive it, you should carefully scrutinize every item it contains and dispute any items that are negative and that are inaccurate.
These are the four best methods you can use for rebuilding and improving your credit after bankruptcy. To learn more about the effects bankruptcy will have on your credit if you use it, talk to a bankruptcy lawyer in your city. For more information, reach out to law firms like Martinez Law Firm.