When you make the decision to file for bankruptcy, it could be because of losing a job or discovering that you owe more money than you’re able to budget for each month. After the process is complete, you’ll usually need to wait about seven years before you can begin building your credit again in a positive direction. Here are a few ways to take the next step forward.
After filing for consumer bankruptcy, you want to check your credit report to get the most recent information about your accounts. Keep a record of your balances and any collection accounts that you might owe. You also want to get a better understanding of what can help your credit and what could hurt it in the future before trying to open new accounts.
Once you begin opening accounts, you want to use them responsibly. Avoid charging too much on each account that you have as this can result in higher utilization. This can then cause your score to decrease. Try to open one or two accounts at first so that they will report on your credit and so that they are easier to manage with monthly payments. Try to pay off your accounts as soon as possible so that you don’t carry a high balance.
If you’re unable to get a traditional credit card, then consider getting a secured card. You’ll pay a deposit, which is the amount of credit that you have to use each month. As you make payments on time, the card could unlock to one that’s unsecured with a higher limit.
Although filing for bankruptcy might seem like a last resort, it can sometimes be a reset for your credit. A financial planner or an attorney can help you budget and find the best kinds of accounts to open when you begin to re-establish your credit.