How you can rebuild credit after filing for bankruptcy

On Behalf of | Jul 26, 2021 | Bankruptcy

Filing for bankruptcy is a sensible move when you are troubled by debt. While filing for bankruptcy might be the right decision in light of your current financial situation, it might actually hurt your credit score in the long run. This is because declaring bankruptcy reflects poorly on your ability to manage debt; this is likely to affect how lenders view you as a potential borrower.

So how do you rebuild credit after filing for bankruptcy?

While a bankruptcy will reflect on your credit report for up to 10 years, this does not mean there is nothing you can do to improve your credit score during this period. Here are a few steps you can take to improve your credit score after filing for bankruptcy.

  1. Pay your bills on time

As already mentioned, your payment history is the most important component of your credit score. As such, it is important that you make it a priority by paying your bills on time going forward.

  1. Pay close attention to your credit

It is important that you keep an eye on your credit report and credit score. Besides helping you track your progress, this will also help you gather the information you need to fix potential issues that could ruin your credit score further.

  1. Live within your means

It is crucial that you stay away from debt that could potentially frustrate the efforts you are making towards repairing your credit. To achieve this, you need to live within your means. Create a budget and stick to it to the best of your ability.

When you are overwhelmed by debt, it is only natural to think about bankruptcy. Understanding your rights and obligations to your debts can help you make the right financial decisions in light of the challenges at hand.

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