Repairing Your Credit After Bankruptcy

The personal bankruptcy process is useful when you are drowning in debt and in need of a fresh financial start; however, repairing your credit after filing bankruptcy will take some time and effort, and only once your credit score has been raised will your financial slate truly have been wiped clean.

After your bankruptcy has been finalized and your debts discharged, you should make sure to use the skills learned in the credit counseling and financial education courses to ensure that you do not find yourself in financial trouble again. It is crucial to keep on top of essential bills and resist the temptation to splurge on high-price extravagant purchases.

The first step in repairing your credit after bankruptcy is to acquire a credit card. The only problem is determining which is the best credit card after bankruptcy. In order to do this you should shop around for one with the best interest rates and lowest fees. Due to bankruptcy appearing on your credit history, you will likely have to start with a secure credit card that requires a cash deposit of anywhere from $200 to $1,000 before qualifying for an unsecured card in a few months time. In order to raise your credit score, you must ensure that the card reports to all three credit bureaus and that you do not use more than 30% of the credit available to you. Try getting a store charge card or a gas card in addition as it will take two or three cards being used regularly to repair your credit.

Some might ask if repairing your credit after bankruptcy is really all that important. First you must realize that a personal bankruptcy filing lowers your rating by approximately 200 points which leads to higher interest rates and difficulty applying for mortgages or personal loans, getting promoted, and finding accommodation. Lenders, employers, and landlords are just a few of the many people who verify your credit history before doing business with you and a low credit score is a glaring indication that you may be a credit risk to them. When taking all of this into consideration it is obvious that repairing your credit after bankruptcy is of paramount importance.