Rebuilding after bankruptcy is a process. It starts with not incurring any negative credit after such time you file for bankruptcy. For example, after your bankruptcy case is over, you want to make sure that you do not incur any negative credit items on your credit Bureau. This would include not falling behind on any installment obligations, not incurring any medical debt that goes unpaid, and not incurring any utility bills that do not get paid timely. If you can start paying everything on time, then you will begin to see your credit score increase.
Another important thing that you can do once you’re bankruptcy case is over, is to obtain a secured credit card. A secured credit card is one in which you put a certain dollar amount on account at a financial institution, and that institution gives you a credit card with a certain dollar amount of charging privileges. If you can maintain good credit with that card, then the card may actually turn into an unsecured credit card within a matter of six months to two years. The credit bureaus will receive positive information from the credit card issuer provided you stay current and make all of your payments on time. This fact alone will increase your score over the next six months to two years after filing for bankruptcy.
You should also try and open up at least one additional line of credit. This may be auto financing, furniture financing, or any other installment payment plan that you can enter into for a product or service. By having at least one trade line in addition to your secured credit card, you are on your way to improving your credit score to the point where you might actually be better off within six months to one year after you file for bankruptcy.
Another important area that does not get enough attention is to evaluate your budget immediately after a bankruptcy filing. You should write down everything you spend and earn over the next two months immediately after filing for bankruptcy. What you are looking to make sure is that you do not get into the same bad habits that caused you to fall into debt in the first place. Hopefully, you have eliminated the majority of your unsecured debt, and now have the ability to save money for your future. By going through a budget, you will be able to determine whether or not you are able to put money away or whether or not you are spending too much in certain areas. For example, if you were spending $600 or $700 per month before your bankruptcy, then you want to make sure that you are spending less than that post filing bankruptcy.
As you can see, by paying all of your debts on time once you file for bankruptcy, and by incurring at least one secured credit card and one additional trade line, you will be in a great position to improve your credit score and get better offers for credit in the future. The worst thing that you can do is to fall back into the same trap that got you into debt in the first place. By changing your budget and changing your ways to the positive, you can help ensure that you’re not going to ever need to file for bankruptcy again.
