So you’ve filed bankruptcy – Now what? If you’re one among those individuals who has already filed it, the process of recovery is rather difficult and long. In 2018, more than 800,000 people took help of this last resort in order to bring back control over their piling debts. Considering the fact that a bankruptcy can stay on your credit report for at least 10 years, rebounding and repairing your credit is extremely necessary.
According to a study published by a financial company, it is seen that only after 2 years of filing bankruptcy, 70% people who filed it had a score of 650 and higher. While there are resources like 24Cash Bankruptcy Guide that help you with information on rebuilding your credit post bankruptcy, you should still know the few DIY steps to take.
Reconsider your budget
It is most likely that you had set the stage for a bankruptcy due to a faulty budget. Even though there were other events that pushed you towards that edge, rewriting your budget is a must. Find out what went wrong the last time. Why did your budget fail? What were the errors that called for such an instance? Start your new budget with 3 columns – fixed, variable and irregular. Plug all the holes within a leaky budget.
Build credit by using a secured credit card
As soon as your bankruptcy is discharged, make sure you open a secured credit card. You may find a secured card that doesn’t charge you a yearly fee. You will require providing a deposit with a secured card and henceforth the lending company will assign the credit limit based on the amount you deposit. 24Cash.ca is a company that lends online loans to borrowers with moderate credit. You may try taking out new loans to build your credit.
Maintain your job
It is extremely important that you try to get a new job or keep your job (if you already have it). It is necessary to have a stable history of employment and a residential history as well. It is sad enough to note that a large number of landlords are beginning to check your credit score before allotting an apartment to you. Not only that, your employer will also check your credit score before hiring you. Hence, a little bad luck can push you into the vicious cycle again.
Maintain a bank balance
It is necessary that you open a checking/savings account and also maintain it. Once you have filed bankruptcy, the insurance companies will consider you as a risky borrower who may not be able to pay his insurance premiums. Most banks offer a second-chance program for individuals who are going through such a financial disaster. So, try to keep a positive balance to show employers that you already have a stable cash flow.
Once you start behaving responsibly, you will soon be rewarded with a positive credit score. This score will let you grab low premium rates on insurances and reasonable rates on mortgage loans. Ensure you never use your recovering score to dig deep into debt once again.