Bankruptcy is a situation that all people try to avoid. One reason is the fear of never being approved for financing again, such as with mortgages or auto loans. While it may be true that it takes a long time to bounce back, it’s far from impossible. If you have declared bankruptcy and are looking to regain your financial footing, you will need a plan to build your financial situation back up.
Start With Your Personal Credit Report
Filing for bankruptcy may wipe a number of debt obligations from your credit report, but it will not be a blank slate. It can take some work to get an inaccurate charge removed, but doing so can help ensure your credit score improves faster. Check your current credit report by accessing free sites like AnnualCreditReport to make sure it’s accurate.
Consider Alternatives To Debt Spending
Not all debt is bad – you need to show you’re capable of paying off debt in order to rebuild credit. However, less is definitely more if you want to avoid getting into similar trouble. Consider ways to build-up cash-based savings for both discretionary items as well as an emergency fund. Doing so will help you avoid using high-interest credit cards, except in cases of extreme emergency.
Choose Your Credit Rebuilding Method Carefully
If there is no other option, the best way to rebuild your credit after bankruptcy might be through the use of a secured credit card. As you continue to use it and pay on time, your credit will improve and your credit line will increase. Sometimes banks or credit unions offer personal loans for credit rebuilding, although you may need to be a member in order to be approved.
The bottom line is that bankruptcy recovery takes work, but with the right roadmap, you can get there. You just need to have the right financial goals and be disciplined in them.
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