Filing bankruptcy can give you the opportunity for a fresh financial start. Working with a knowledgeable bankruptcy lawyer such as Brent George can relieve pressure from creditors and stop garnishments or other collection activity. Once the bankruptcy is discharged, it’s time to rebuild credit and focus on the future.
Budget Spending and Saving
First, understand your spending habits. After tracking income and expenses for a couple of months, develop a budget that you can adhere to. Make saving part of each month’s budget so you’re ready for unexpected expenses or great opportunities. As your circumstances change over time, update your budget to reflect these changes.
Monitor Your Credit
Even though your credit score may have gone down due to past delinquencies, it’s never too soon to start rebuilding. Make sure your credit report accurately represents your credit activity. You may want to discuss options for correcting errors with your bankruptcy lawyer.
Make Timely Payments
By making timely payments, your credit score can start to improve. It’s also important to avoid bouncing checks, incurring overdraft fees, or taking out payday loans. When these credit options are on your credit report, they may give your creditors the impression that you’re experiencing cash flow issues.
Rebuild Credit with Credit
While you may use cash or debit for the majority of purchases, you may also look for opportunities to purchase on credit when possible. It can be helpful to set up a credit card account and use it only when you plan to fully repay the balance each month. In addition to helping rebuild credit, you may also earn awards such as cash back, airline miles or discounts.
Once you have a couple of credit accounts established, you may not want to add or move accounts for at least a couple of years. Although you may qualify for a lower rate or introductory offer, opening and closing accounts, or adding too many accounts, may lower your credit score in the long run.
Postpone Making Major Purchases
You may be able to find lenders to finance automobiles or other major purchases immediately after bankruptcy. If possible, postpone these types of purchases for at least a couple of years. You may qualify for better rates and terms once you can show positive payment history.
Share Your Story
Bankruptcies occur for many reasons. Sharing your story with potential creditors, including the steps you’re taking to rebuild your credit, may positively influence their credit decisions. Consult with your bankruptcy lawyer on how to present your circumstances in the best light as you move forward with rebuilding your credit and bouncing back from bankruptcy.