Although you may want to avoid credit after bankruptcy, this is actually not the best thing to do. Some items are very difficult, if not impossible, to buy without credit. For instance, do you have enough money to buy a brand new house without credit? Can you even afford to buy a new car without credit? If not, you may have to rely on credit to make these or other large purchases at some point in your life. And, if you want to secure credit after bankruptcy you must first rebuild your credit rating.
3 Simple Steps you Can Take to Rebuild your Credit Rating after Bankruptcy
Rebuilding your credit after bankruptcy is a process. Unfortunately, there is no magic wand you can wave, and feel free to ignore those companies that claim they can erase all of the negative reporting and rebuild your credit rating overnight.
You can begin the process of rebuilding your credit by taking these 3 simple steps:
1. Create a monthly budget.
2. Stick to your monthly budget.
3. Pay your creditors on time.
Once you have mastered these initial steps – give yourself a couple of months – you should then consider opening a small credit account. When working to rebuild your credit, it is a good idea to keep one or more of your credit accounts open. Making timely payments to your creditors will help increase your FICO score and credit rating over time.
Properly managing your finances and paying your creditors on time is crucial to rebuilding your credit rating after bankruptcy. At some point, you will probably need to rely on credit to make large purchases. You can rebuild your credit, better manage your finances, and discontinue those old habits that may have led you to bankruptcy in the first place. So, start on your monthly budget today and begin the process of rebuilding your credit rating.