Declaring bankruptcy is the single worst thing you can do to your credit, but sometimes it is the only way to ensure that you will be able to access credit in the future. While a bankruptcy stays on your credit report for a period of seven to ten years, declaring bankruptcy allows you to eliminate debts that you have no financial means of repaying and stops the legal processes against you so you can focus on rebuilding your finances. Reestablishing your credit after declaring bankruptcy can be difficult, but it is not an impossible task. Here are some steps you can take to reestablish your credit after declaring bankruptcy.
Maintain A Record Of On Time Payments For Remaining Debts
Declaring bankruptcy rarely discharges all of your debts, so there is a good chance that you will still be repaying some of them, along with paying your regular monthly bills needed to maintain your lifestyle. Maintaining a record of on time payments for these accounts is critical to rebuilding your credit after a bankruptcy. The negative information will slowly have less of an impact on your credit score as time passes and will eventually drop away completely. You will want that negative information to be replaced with positive information that will increase your credit score.
Check Your Credit Report Regularly
After declaring bankruptcy, it is very important to check your credit report regularly for any misreported information or negative events affecting your accounts. While we all wish that all the information in our credit reports would be 100 percent accurate all of the time, nearly a quarter of us have incorrect information on our credit reports that is dragging down our credit score. The faster the mistakes are found, the easier they will be to correct. You can get your credit reports for free at www.annualcreditreport.com.
Obtain A Secured Credit Card
Secured credit cards will be much easier to get than an unsecured credit card after declaring bankruptcy, but they can be used in the same way to rebuild your credit. With a secured credit card, you deposit money into a savings account that is attached to your credit card and that amount determines your credit limit. Good secured credit cards may have an annual fee, but the cost is generally worth it when trying to rebuild your credit after a bankruptcy. There are many different lenders available that offer these types of credit cards, so review your options carefully before making your final decision.