Credit Repair After Bankruptcy

Filing for bankruptcy is a drastic move, but for many it's the best option for their situation.  Credit repair after bankruptcy is a long process since a bankruptcy will stay on your credit report for the next ten years.  That doesn't mean that you should just chill out and wait for the ten years to pass.  You can be taking action now to ensure that your credit score will be very strong after the bankruptcy is gone.

In order to not put yourself in a worse situation than you're already in, you must make all of your payments on time from now until you die.  I can't stress that enough.  Just because you get to start all over doesn't allow you to make the same mistakes again.  Late payments and defaults after bankruptcy are a recipe for permanent financial distress.  Beg, borrow, and steal (okay, you shouldn't steal) to make your payments on everything each month. 

In addition to making your payments each month, you have a few other ways to get your credit repaired after bankruptcy.

Image courtesy of Logan Cyrus via flickr.com.
Image courtesy of Logan Cyrus via flickr.com.

Get Rid Of All Debt First

Credit repair after bankruptcy doesn't involve as many of the stressful decisions that you made before your bankruptcy, but there are still some. In some cases, not all of your debt was discharged by the bankruptcy. In this case, you have to get all of it paid before you can look to starting over again. Use a credit consolidation company if necessary to get everything paid. This is the crucial first step to repairing your credit after bankruptcy.

After bankruptcy you may also still have some open lines of credit or credit cards, if this is the case stop spending and using them pronto. Get all of the outstanding debt paid off first, then start working to build your credit back up. You may have to make some other short term sacrifices to make it through this better than you've been in a very long time. It will happen, just be patient.

Get Approved For Something!

After getting all of your past debt paid off, it's time to start your new credit history. You can use the fact that you are paying everything off as proof that you're serious about repairing your credit. It's a good idea to call up your old creditors and see if there is anything that you can be approved for. A credit card with a $50 limit and an extreme APR will help you get reestablished if you can maintain it and pay most of it off each month. It will help to leave at least a few dollars of balance each month to help your credit score improve faster.  Bankruptcy credit cards are available, it's just a little difficult to find them.

It'll take a bit of time before any credit company will pay attention to you and consider qualifying you for a credit card, but it will happen. You have ten years before you'll see any major results from this, so be patient. With your new credit I have to stress again that it's extremely important that you make each and every payment on time. There's no reason to put yourself back into the situation you were in before your bankruptcy.

Don't Blow It!

If you're serious about repairing your credit after bankruptcy you'll have to keep that discipline and determination for the next ten years to really see the fruits of your labor. It'll pay off in time, you just have to see it through.

If you can follow these steps to resolve debt and make it through without having any issues you will begin your post-bankruptcy life with good credit. It's well worth the amount of work that you're going to put into it.

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1 comment

scheng1 6 years ago

I think they should take out the bankruptcy record after the person has cleared the debt. Keeping it for ten years is way too long.

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