Life after bankruptcy can be extremely difficult. Financial institutions will be more hesitant in granting your loans while landlords might think twice before letting you in their properties.
Fortunately, all is not lost. Despite the grueling financial consequences brought by bankruptcy, it is still quite possible to reestablish your financial position and rebuild your credit score. Hence, the following are several strategies on how you can rebuild credit after bankruptcy.
1) Assess your current credit status – know where you stand
The first and foremost thing that you should do when rebuilding your credit is to assess your current credit status. Write down all your existing debts and review each item closely. It is also recommended that you order credit reports from all three national credit bureaus; TransUnion, Equifax and Experian.
Needless to say, before doing anything else, you should first know where you stand.
2) Create a comprehensive debt-reduction plan
After scrutinizing your credit status, you can now create a comprehensive debt-reduction plan. You should devise strategies on how you can pay off your specific debts. You should also determine exactly where your loan payments will come from and how long it will take to pay off all your debts.
You should pay your existing debts regularly and on time in order to prove to creditors that you can still be trusted when it comes to credit.
3) Open a bank savings account; consider a new credit card
Opening a bank savings account is another simple yet effective way to improve your overall credit score. Another advantage of opening a bank savings account is that it allows you to opt in automatic debit arrangements. Similarly, you should also consider opening a new credit card as it can further improve your credit score.
According to Business Finance Major, the Orchard Bank offers a credit card plan that is “designed especially to help people rebuild their credit after bankruptcy.”
4) Review your credit report for possible inaccuracies
Sometimes credit reports are outdated and contain inaccuracies that can negatively affect your credit score. That is why you should take time to review the credit reports released by credit bureaus.
5) Always pay your utility bills and mortgages on time
Another easy and effective way to rebuild your credit after bankruptcy is by simply making sure that your utility bills and mortgages are paid on time. As mentioned above, there are some bank savings accounts that offer an automatic debit arrangement with commercial companies.