While no one wants to file bankruptcy, doing so can give you a fresh financial start. After your proceedings, you can start thinking about ways to manage your money better than before. If your bankruptcy stemmed from credit card debt or unpaid loans, you may consider whether you’re ready to use credit responsibly. Before you start, it’s important to learn how you can rebuild it.
Use a secured credit card
You may have difficulty receiving approval for a loan or credit card after filing bankruptcy. Yet, you may still qualify for a secured credit card. This type of card requires you to provide a down payment equal to your credit line. The issuer will keep your deposit if you fail to pay your bill. But over time, you might demonstrate that you can pay your credit card bills on time. In this case, the company may return your deposit to you. And they will likely allow you to upgrade your account to an unsecured arrangement, too.
Sign up for automatic bill pay
If you had trouble managing fixed bills before bankruptcy, using automatic bill pay will ensure you prioritize them. Most services – whether for utilities, subscriptions or memberships – offer this option for customers. You can take advantage of this arrangement by using your credit card to make payments on scheduled dates. You will then need to link your bank account to your card so it can cover its balance immediately. Not only will you build credit, you will ensure all your bills are paid on time.
Enlist in help
You do not need to rebuild your credit alone, especially if you’re having difficulty receiving approval for cards or loans. If you have a relative with a good credit history and a high income, you can ask to become an authorized user on one of their cards. If they agree, you can work to increase your credit score through their account until it’s high enough to secure your own card. You may also need a loan to finance a significant purchase at some point after filing bankruptcy. In this case, you could ask this person if they will act as a co-signer. Your odds of approval will increase if the lender deems your co-signer trustworthy.
Rebuilding your credit after bankruptcy may seem daunting. But once you know the steps you must take toward achieving a healthy score, the process will become manageable. An attorney with bankruptcy law experience can help you find a way forward.