Credit is a big part of life after filing bankruptcy. Here’s what you need to know.
Bankruptcy is a big step to take when you’re facing financial difficulties. It brings positive change, but it also takes work to build back your financial foundation after you’ve filed. Luckily, there are several things you can do to improve your situation.
There are many ways to get your credit back on track after a bankruptcy. Here are five of the most effective methods:
1. Start by getting a secured credit card and using it responsibly. This helps rebuild your credit score over time.
Secured cards allow you to “prove yourself” financially when most credit card companies are unwilling to work with you and extend you credit. It’s one of the best ways to re-establish credit and prove to lenders that your spending habits have changed after bankruptcy.
You can learn more about the pros and cons of secured credit cards here.
2. Make sure you keep updated on your credit report and score so that you can identify any activity that may be causing your score to drop.
Mistakes happen. When those mistakes are on your credit report after bankruptcy they can do a lot of damage. It’s hard enough rebuilding your credit. The last thing you need is a mark on your credit that doesn’t belong there.
3. Make sure you get life insurance and health insurance after filing bankruptcy so that the life event doesn’t cause any issues for your future financial life.
This is something not a lot of people think about when filing for bankruptcy. However, you want to do everything you can to prevent problems in the future. Building in protections “just in case” is an essential part of protecting your creditworthiness.
4. Look into joining a credit union or getting an auto loan with someone you trust to rebuild credit in a positive way.
These institutions tend to be more forgiving and offer more personalized services.
5. Finally, try to avoid bankruptcy in the future.
Try and take proactive measures that will help prevent life events from causing you to file again by keeping a strong savings account or building up an emergency fund for life’s surprises.
This is often easier said than done, of course. Most people don’t make financial decisions hoping that it results in bankruptcy. The exact opposite is true. Many people even avoid bankruptcy when it would be the best option for them.
The important thing is to do what you can to mitigate your risk. Anticipate financial challenges in life and create a plan to help you cope with them. If you can avoid turning to credit cards in emergencies, you stand a better chance of avoiding bankruptcy and maintaining good credit.
Need Help with Rebuilding Credit and Life After Bankruptcy?
Life after filing bankruptcy doesn’t have to be scary if you are aware of some ways your credit score can improve over time.
If you’d like to know more about what you can do to improve your credit after bankruptcy or you are ready to speak to someone about filing, contact the Law Offices of Robert M. Geller at 813-254-5696.