Life After Bankruptcy

You've filed for bankruptcy. Now it's time to start rebuilding your credit.  It will be hard to get credit at the start, but it won't be impossible.  Here are a few tips to get you started on your credit recovery and making the most of the fresh start bankruptcy provided for you.

  • You should not to try to borrow money too quickly. Instead, you should make timely payments every month to help re-establish your credit and so that you can get loans on more favorable terms later.  
  • Begin building up an emergency savings account.  You should try and save at least 10% to 15% of your income each week.  The goal is to save enough money for 6 months of expenses.  We know that may sound like a lot, but if you get used to putting a little money away each week and don’t touch it unless it is an emergency, the balance will grow quicker than you think.
  • Examine your credit report for all three credit reporting agencies to make sure there are no errors.   

  • Maintain a job.  If you don’t already have one, it is vitally important to get and keep a job as soon as possible.
  • Maintain a stable residence.  Creditors look at your job and residential stability when determining your credit worthiness.  Unfortunately, a growing number of landlords are running credit checks prior to renting a unit.  If you cannot get an apartment or rent a house, you may have to room with a friend or relative until your credit rating improves.  
  • Pay your bills on time. It is critical that you stay current on your post bankruptcy bills so that you don’t get behind on your bills and your credit record stays clean and continues to improve.
  • Open and maintain a checking and savings account.  This shows creditors that you have a stable income and the ability to maintain such accounts which will help re-establish credit as well.  
  • Start to rebuild your credit slowly.  It is important to make sure that by building credit you don’t fall into old habits or traps.  One way to start improving your credit is to open a secured credit card account right after you are discharged from a bankruptcy. Simply head to a bank, fill out an application and make a deposit into a secured account. The bank, in turn, provides a credit card with a credit line that's 50 percent to 100 percent of the deposit.
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