Becoming bankrupt does not mean that it is the end of the world for you. There are several things you can do to redeem yourself after filing bankruptcy. Most entrepreneurs take bankruptcy as a chance to commence a new and brighter financial future. In essence, filing bankruptcy is necessarily the first step to re-establishing a good credit score. You should apprehend that you cannot move if you file bankruptcy and relax. You have to work for everything to regain back your credit score. Improving your credit score after bankruptcy is something that requires devotion and time. However, it can still be done within a short time if you only give it more attention. You should also understand that your credit score after going bankrupt is based on the data collected in a given period of months or years. Honestly, a month or half a year cannot be enough to improve your credit score. It can somehow improve the score by a small margin which may not get you better credit terms. Therefore, you require at least one year of data will to regain your previous financial situation. Continue reading the guide below to learn more on how to improve your credit score after bankruptcy.
Paying Obligations on Time
The first step towards improving your credit score after bankruptcy is paying your current obligation within the stipulated period. The state of bankruptcy does not necessarily remove all the debts.
Some of the loans like the secured ones do survive throughout the bankruptcy period since your lender is entitled to a value of the collateral. Such financial situations are called reaffirmations. Reaffirmations can survive through bankruptcy with the same terms being forwarded. Therefore, you need to keep settling your obligations in time to improve your credit score after bankruptcy.
Creating a realistic budget can help you to stay always on top of all your finances. Creating a budget also allows you to develop financial discipline which is a virtue that lacks in most people. Before you filed for bankruptcy, you probably read through pre-discharge credit counseling. The pre-discharge credit counseling is necessary because you give an account on your budgeting. If you are not able to come up with a proper budget plan, you can seek help from a nonprofit credit counseling agency that offers free necessary consumer guidance on budgeting.
Regular Credit Report Checks
Make sure you develop the habit of checking your credit reports daily if possible. Regular credit report checks allow you to identify errors and rectify them before it is too late. When you have errors on your credits reports, it affects your credit scores.
Secured Credit Card
Finally, after completing the filing of a bankruptcy, you should get a secured credit card. To achieve this, you are required to have a credit account for a strategic improvement of your score. Most creditors offer secured cards to hasten the credit scores for the high-risk borrowers. To have a secured credit card, you need to apply online. You can follow the guidelines of the lender to improve your credit scores.