Personal bankruptcy is an effective way to resolve debt that you cannot realistically pay off. But while this approach may legally eliminate many owed balances, the financial management of your past can still leave a mark on your credit score. Depending on how you file, bankruptcy can be listed on your report anywhere between seven and ten years. Fortunately, you can make strides during this time to gradually restore your creditworthiness. If you’ve recently filed for bankruptcy, below are four ways you can pursue credit repair to improve your future as a borrower.

4 Credit Repair Strategies After Filing for Bankruptcy

1. Approach New Credit With Caution

The only way to slowly rebuild your credit is to take on new debt and show that you can pay it off responsibly. However, you’ll likely have a hard time qualifying for many financing opportunities. When you are approved to take on new debt, it usually will come with a high-interest rate that will make repayment more difficult.

To avoid falling back into unmanageable debt, it’s best not to rush into borrowing too much at once. Whenever you do open an account, you should make sure that you’ll be able to pay the balance with your current income.

It’s also smart to stick with secured financing, as these balances will be less risky to manage. Some common options include co-signed personal loans and pre-paid credit cards that shield you from missing payments.  

2. Stay Strict About Spending & Saving

Overspending and not having enough backup funds to cover emergencies is a surefire way to get trapped by debt again and bring your score down. That’s why credit counselors recommend establishing a realistic budget that will keep you from spending too much on unnecessary expenses. You should also start building a small savings account that you can use as a safety net if a financial emergency occurs.

3. Consistently Pay off New Balances  

When you are approved to borrow, make it a priority to pay the balance in full every month. Doing this will keep your debt-to-income ratio low, as well as demonstrate that you can make payments on time. These factors can go a long way in raising your credit score.

4. Check Your Score Often

Check your credit report periodically to make sure all your debt management activities are properly being reported. If there are errors in the report, correct the claims with the creditor to bring your score down.

 

When you want to build a better financial future after bankruptcy, turn to the professionals at Buypower Eminence. Providing extensive credit counseling services across the country, our debt relief firm will review your situation and develop a personalized strategy to help you gradually restore your score. We will also take aggressive strategies to dispute errors on your credit report to ensure you’re not paying penalties you don’t deserve. To learn more about their services and credit repair guarantee, visit this debt management company online or call (833) 428-9769.