Filing for bankruptcy can be a difficult decision. Acknowledging that your debt has gotten out of control and that you need help to get your finances back on track is not always easy. However, bankruptcy can provide you with a truly fresh start. Eliminating your debts, including large credit card bills, medical bills, or other debts that have stacked up because of issues such as the loss of a job, can take away a huge burden and ensure that your family will be able to avoid serious financial problems in the years to come. Part of the fresh start following bankruptcy involves rebuilding your credit, which will help you qualify for loans or other benefits in the future. As you plan for your life after bankruptcy, there are steps you can take to improve your credit score.
Pay Your Bills On Time
One of the most important things you can do to rebuild your credit is to pay all of your bills before the monthly due date. In addition to making monthly payments on any loans you kept following your bankruptcy, such as a home mortgage or auto loan, you may want to set up reminders or automatic payments for other bills, such as utilities. Making prompt payments on a regular basis will show creditors that they can trust you and that you are responsible with money management—two qualities they look for when considering whether or not someone should receive loan approval. On the other hand, any late payments may cause your credit score to decrease further, affecting your ability to build your credit back up.
Get a Secured Credit Card
You may be hesitant to apply for a new credit card after filing for bankruptcy, since you will want to avoid racking up new debts that could cause future difficulties. However, credit cards can actually be beneficial in the long run if used responsibly. If you are unable to receive approval for a regular credit card because of the bankruptcy on your record, you may be able to receive a secured credit card. With this type of card, you must make an upfront deposit that serves as collateral for any purchases made with the card.
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