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10 Important Tips After Bankruptcy

One common problem people emerging from bankruptcy often face is the negative, long-term impact it has on their ability to be approved for new credit at a reasonable cost. Many creditors will not lend to you for one to two years. When you finally begin to qualify again, you will typically be categorized as “extra high risk,” which often is accompanied by lower credit limits and very high interest rates.

The good news is that nothing in credit is forever. The effect of a bankruptcy on your credit score can start to diminish the day your case is closed.

10 Important Tips to Rebuild Your Credit After a Bankruptcy:

1. Plan your credit recovery – take it slow and easy – do it right – don’t exceed what you can afford.

2. If your credit report contains inaccuracies about debt that was discharged through your bankruptcy, contact the creditor or the credit bureaus to request a correction.

3. If your problem was over-spending, create a written budget and STICK to it.

4. To re-establish a strong credit profile, you need a good history of payments from credit cards and installment debt, such as autos, student loans or a home loan.

5. The rebuilding process requires you to use credit responsibly. Use only a small portion (30% or less) of your available credit line and ensure you make a payment every month.

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