Filing for Chapter 7 bankruptcy helps people who have an overwhelming level of debt start over again with their finances and move forward with more responsible borrowing habits.
However, after the Chapter 7 bankruptcy timeline is over, your bankruptcy will leave a pretty big mark on your credit report for the next 10 years. That can make it extremely difficult to get approval for credit on major purchases like cars and houses. But while it’s difficult to build up a good credit score again, it certainly isn’t impossible.
Wondering what you can do to build up your credit score again after you’ve gone through the Chapter 7 bankruptcy timeline? Here are three ways that it’s possible to re-establish your credit and start over with a fresh financial slate:
Put together a budget
No one necessarily likes drawing up a budget. It would just be easier — and more fun — to spend freely and not think about the amount of spending money each paycheck will allow, right? Sadly, that type of thinking is what leads so many people into inescapable debt. To take the first step toward better credit, make a budget that takes all your monthly bills and expenses into account and pay your bills on time, as doing so will improve your credit score.
Open up one credit card to start building up credit again
When it comes to actively building up your credit again, the best way to do so is by having a secured credit card. With a secured credit card, your credit limit is only as high as the amount of money you deposit into it. By making small purchases with this card and paying them back in full and on time, your credit score will start to go up.
Don’t neglect saving money
No one wants to save money for an emergency that may never even happen. However, with today’s economic climate, there’s no excuse not to put a portion of your earnings into a savings account each month. Having a reserve of money on hand will also come in handy if you accidentally overspend and don’t want your debts to pile up again.
Have any other questions about how to file for bankruptcy with a Chapter 7 bankruptcy attorney or how to rebuild your credit after doing so? Feel free to ask by leaving a comment below this article.