Rebuilding Credit After Bankruptcy

The Possibilities: Bankruptcy - Credit Card - Debt Free

How do you begin rebuilding credit after bankruptcy? Do you know how to repair credit yourself?

• Learn from your mistakes. Don't go out and get yourself into debt again just because you are currently debt free after filing bankruptcy.
• Begin rebuilding your credit score immediately. The quicker you begin, the quicker you will rebuild your credit score.
• Clean up your credit report. Make absolutely certain that the items on your report are yours, that they are accurate, and updated. Be sure to get reports from each of the three top credit bureaus. It's possible to see something on one report that doesn't appear on another. Make sure your credit report reflects the bankruptcy and doesn’t show your debt as outstanding.
• Live on less. Spend only what is necessary for several months so you can meet your monthly bills on time and put aside (save) money at the same time.
• Save, save, save. Do your best to save a minimum of 25% of your paycheck each month. Put aside as much money as possible in savings. Once you have a good "cushion" in the bank, it's time to apply for a secured credit card.
• Apply for a secured credit card. Yes, it seems opposite of what you should do, right? However, rebuilding credit after bankruptcy is all about obtaining new, small lines of credit and then paying them off in full each month to establish excellent credit once again.
• Apply for an installment loan. An installment loan would cover an automobile, mortgage, or student loan. Securing this type of loan and paying it off faithfully each month will help to re-establish your credit standing. However, it's possible that no one will consider you for this type of loan until roughly a year or 18 months after you declare bankruptcy. In the meantime, build your credit by paying your utility bill, telephone bill and other monthly bills on time and in full.
• Check your credit report often, roughly two or three times a year. It's vital to your financial security and credit score to make certain your credit report reflects your new spending and saving habits. Never hesitate to contact a credit agency to correct an inconsistency or incorrect line item on your report.

As you can see, rebuilding credit after bankruptcy is not an easy road, but it is possible to become financially secure by adopting a new outlook toward spending and saving and by re-establishing excellent payment history.

Think of it this way: nothing feels as good as being free from a mountain of debt! That car, those strappy heels, that huge home...none of it will make you forget you have a huge amount of debt hanging over your head. Being in debt is like walking around with a heavy, wet blanket weighing you down. Be free of the burden of debt by working hard at rebuilding your credit after bankruptcy and you'll be so glad you did!

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