How to Establish Credit after a Bankruptcy
Building a credit is not an easy job, but it does help a person in securing crucial credit facilities which is quite useful.
With current economic downturn, a lot of people are filing for bankruptcy. It is more or less synonyms with committing a credit suicide. However, it is certainly possible to get back from this unfortunate event and in some time, you can once again have a great credit score. It will surely take a lot of commitment and perseverance on your part but is by no means impossible.
Instructions
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1
Open Checking and Savings Account
These are needed by everyone. So open them ideally close to your home. The checking account will help in dealing with everyday needs while whatever you save can go to the savings account.
Compare various options that you have for this purpose and see which bank offers the best deal. It is not a bad idea to have both accounts with the same bank. -
2
Secured Credit Card
You will not be getting an unsecured credit card after filing bankruptcy so get your hands on a secured one. Use it carefully and pay it off in full every time to get your credit back on track. Be sure to get one that does not have a crazy setup fee though. -
3
Save Money
You need to save money in order to make sure that in case there is an emergency, such as a hospital visit or a car breakdown, you should have the money to pay in cash. Using credit card for these purposes will get you back into unwanted debt. -
4
Use More Cash
Instead of buying groceries (and daily household items) on the credit card, it is best that you pay cash. Only have specific uses for the credit card. -
5
Pay Bills on Time
Whenever a bill arrives, pay it off right away. You can do so online as it is the fastest and surest way to avoid delays. In case you are more of a traditional person, sending cheques is just fine. -
6
Pay in Full
Paying in full is crucial; not doing so can be tempting and probably was the reason behind your bankruptcy in the first place. Spend little on any kind of credit and pay it off once it is due. There are no prizes for paying partially except for greater interest that you will need to pay. -
7
Wait it Out
The bankruptcy should be off your credit report in seven years. Work hard to build your credit through this period and once it is off, you probably will have a sky high credit score.
