Filing for bankruptcy can cause your credit score to go down
drastically. Worse, it can affect the overall quality of your life for quite a
long time. Once you have filed for bankruptcy, you are no longer considered
creditworthy by lenders and you may find it hard to get approved for credit cards, car loans, and house loans.
Fortunately, there are ways by which you can improve your credit
score even after filing for bankruptcy. Such means, while simple, may be able
to help you raise your credit score back to the way it should be.
Credit reports may contain errors about your credit and payment
activities. Such errors can drastically affect your creditworthiness. As such,
it is recommended to check your reports regularly and to make sure that everything
is being reported there as is.
It is important to note that your credit report does not contain
your credit score. However, you can verify its contents to make sure that all
items are correct. Each account in your bankruptcy declaration should be
identified as “included in bankruptcy” or a similar phrase. You can file a
dispute if one or more accounts are still currently being hold as debt.
Have a Budget Plan
Always have a budget plan. Especially that you have declared
bankruptcy, it is even more important to keep a budget plan to help you track
and budget your finances. A household budget that tells you how much you spend
on specific things, such as household expenses, loans, groceries, and the like,
is a good start. If you have any credit card open, strive to pay the bills on
time. Never delaying payments can help boost your score.
Use a Secured Card
Although it makes sense that you should not open any credit card
account for the time being, a secured card is an option, especially if you have
closed all your accounts. This is a type of credit card, but does not work the
traditional way. Instead of you borrowing money with the potential of getting
into debt, a secured card does not pose such risk. You need to provide a
security deposit, which will, in turn, limit the amount of money you spend.
Set Up Payment Reminders
You may have student loans, mortgages, credit card bills, and
others that need to be paid off on time. You can use a payment reminder tool,
which will notify you of pending bills that you have to pay right away. You can
also choose to pay for the bills automatically by linking to your savings
account.
If you follow the right path after filing for bankruptcy, it is
possible that you will be able to regain your good credit rating. Paying credit card balances on
time and making sure that you have enough money to fund your daily expenses can
make a huge difference.
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