Life after bankruptcy doesn’t have to be hard, but it does have to be planned. If you think that debt consolidation won´t help you avoid the bankruptcy and you have already made the decision to file bankruptcy, you shouldn’t feel like your life after the discharged bankruptcy is going to be impossible to live. It’s really about looking into what your options are, and then building a plan to make the most of what you have at your disposal. Now, it can seem like this would be difficult, but there are a few things you need to know.
First and foremost, lenders know that they can’t punish you forever. Considering that you can’t file again for bankruptcy for 10 years, you’re actually a better credit risk than someone that still has the power to file for bankruptcy. It also depends on the chapter that you filed bankruptcy under. If you filed for Chapter 7 bankruptcy, you will have a pretty good chance of bouncing back.
There are a few things that can boost your credit immediately after bankruptcy:
Secured Credit Cards
This is probably the best way to improve your credit score over time, because secured credit cards are fairly easy to get. Be warned though: the fees can be quite high to open up one of these. First and foremost, a secured credit card works because you’re depositing your own money into an account. In exchange for doing that, you’re getting a credit card. As long as you use it wisely, the card will report to all 3 credit bureaus, which is exactly what you want. The last thing that you want to do is go with a card that doesn’t report properly — you need everything you take out to report as accurately as possible.
Some people leave certain things off their bankruptcy filing, like an existing car loan or even a mortgage. It’s absolutely critical that you make timely payments to these existing creditors, because the consequences are staggering. Yes, a bankruptcy marker will affect your credit, but everyone will be looking after that to see what you actually do. If you continue to practice bad financial habits with your money, you will find that it’s pretty hard to get credit. You need to keep this in mind as you expand outward with your plans for credit.
Make sure that you are looking at your credit report carefully. All of the debts included in your bankruptcy should show “Included in Bankruptcy”. If they don’t, they will still show as negative information in the eyes of future lenders, and it will be hard to qualify for other credit products in the future. If there are any errors in your credit report, you can’t just let them sit there. Make sure that you challenge all errors and bring proof — like your actual bankruptcy filing. The credit bureaus must report all of your information accurately — even when it’s negative in nature.
Overall, it might seem like rapidly building your credit after bankruptcy is going to be tough. However, if you really focus on the big picture, there’s no doubt that you’ll be able to go pretty far!