While bankruptcy does have an impact on your credit score, it also provides a clean financial slate to people mired in debt. As a result, it is a good option for many people who have overwhelming amounts owed to creditors and cannot remit payments reasonably.
After the bankruptcy filing, there are many things you can do to rebuild your finances. Here are a few key steps to take to enjoy a bright and stable future.
Check your credit report
Credit reports contain extensive information on your spending habits and bill payment history. They can also contain erroneous information in some cases, especially after a bankruptcy. Check your report to ensure all debt discharges occurred according to the ruling. If not, reach out to the reporting bureau for clarification. You should also ask about any questionable debts you encounter, which ensures the report is completely accurate.
Apply for a secured credit card
Secured credit cards require a down payment for collateral. They are excellent for people after bankruptcy, as they allow you to build up your credit safely and securely. When using the card, pay down the total balance each month to boost your credit score. Also, try to keep purchases to a minimum, so you do not simply rack up debt again.
Think about past financial habits
Bankruptcy rarely results from a single mistake or event, but it does help to consider whether your financial habits played a role in the process. For example, a lack of savings can lead to reliance on credit, which can rack up interest quickly. In the same manner, a lack of budgeting can lead a person to overspending, without them even realizing it.
Post-bankruptcy is the perfect time to consider your financial habits and whether they played a role in what occurred. By behaving responsibly and spending conservatively, you will bounce back in no time.