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What steps should I take to rebuild my credit after bankruptcy?

On Behalf of | Apr 7, 2023 | BANKRUPTCY LAW - Bankruptcy |

Filing bankruptcy can be just what you need when your finances get into a bad place. It gives you a clean slate, but it will take a toll on your credit.

The good news is that you can easily rebuild your credit, but you should avoid making the same mistakes again that led you to bankruptcy.

Understand your financial situation

The first step is making sure you understand your financial situation. Create a budget and know how much you have going in and coming out each month. Having a clear picture of your finances will enable you to make smarter credit decisions.

Look for bankruptcy-friendly options

You will need to secure a credit card or other loan to help you rebuild your credit. There is a range of credit cards available for rebuilding credit. Look into options that provide you with a low credit limit since they will keep you from charging too much. You may have to get a secured card, which means you have to put a deposit down first. As long as the lender reports to the credit bureaus, it will be helpful.

Practice good habits

Once you have a credit card, you will need to pay your balance off regularly. Make sure never to charge more than you can pay off within the month.  Use the card for regular expenses that you would normally have to help ensure you do not overspend.

Keep in mind that bankruptcy will remain on your credit for a while, and that will impact your credit score. Still, you can improve the situation by making smart decisions about using credit moving forward.