Instead of being sober after filing for bankruptcy, learn how you can work your way back to financial well-being.
It is a fact that declaring personal bankruptcy is not only devastating both financially and emotionally but it can also be damaging to your reputation. Carefully planning your way out and being keen to details are just some of the ways that can surely repair your credit and financial health. Below are additional tips:
Get a copy of your credit report
Get a copy of your credit report as soon as your bankruptcy is discharged. These reports can be ordered online through the websites of the three major credit bureaus – TransUnion, Equifax and Experian or you can send a written request. Credit reports contain your FICO score and FICO scores represent a condensed version of your credit history, employment history, current credit patterns, list of late payments and other factors that comprise your financial health. It is the biggest determining factor that creditors look for before granting a loan.
What you need to do with your credit report is to review it carefully and look for possible errors on entries such as your personal information, accounts that do not appear to be yours, account history that is incorrect, etc. If you discover errors, duly note the item and be sure to provide an explanation on why it is erroneous. The credit bureau will then review your report and respond within 30 days.
Pay your bills
Filing for bankruptcy does not come with a ticket to run from your obligations especially your bills – utility, rent, cable or phone. The more consistent you are in paying these bills, the higher chance you will have in reclaiming your credibility. This is because your remaining bills will be the new foundation of your new credit history and report.
Apply for a secured credit card
In applying for bankruptcy, you will also need to surrender all your credit cards. This may seem painful at first but looking on the brighter side, this may also mean a chance to apply for security cards and rebuild you credit.
Security cards, as opposed to credit cards, require an applicant to deposit a sum of money which serves as collateral and limits allowable credit so as to prevent overspending. This kind of scheme helps prove to lenders that you are credit worthy. Just make sure that you apply for security cards from reputable and recognised banks to avoid future mishaps.
Debit cards make a viable alternative to secured credit cards.
Know when to test “waters”
Transportation is usually the first challenge people face when they go bankrupt. Keeping your vehicle means additional interests so the idea of having a new one seems to be the better alternative. Start repairing your credit history by purchasing a new car. Inquire about the warranty that comes along with your new car and remember not to purchase an extended service warranty. Aside from that, make sure to pay your dues on time and to set a firm dollar amount as your maximum monthly payment and always be consistent.Back to top