Personal Finance

How to rebuild your credit after a bankruptcy

Suffering a bankruptcy is certainly a traumatic experience, both in terms of the emotional toll it takes and in terms of the financial toll it exacts. No one likes to find themselves in this difficult situation, but in many cases filing bankruptcy is the best way out of an untenable debt situation.

One of the many problems with a bankruptcy filing, of course, is that it can be difficult to rebuild one’s credit following a bankruptcy filing. A bankruptcy filing will remain on your credit report for a full seven years, and this can make it difficult to get the credit cards, loans and money you need in the meantime.

The key to recovering from a bankruptcy filing and regaining your good financial name is to use a combination of sound financial planning, careful budgeting, common sense and of course lots of hard work.

Of course the key to rebuilding a damaged credit rating following a bankruptcy filing is to pay all new bills on time. If you can demonstrate a sound history of on time payments going forward, you will be able to recover much faster from a bankruptcy filing. Demonstrating your credit worthiness is the very best way to rebuild your credit after a bankruptcy.

It is important for anyone with a bankruptcy lurking in their past to use any new loans they get, whether they are traditional loans or sub-prime loans, as a vehicle for rebuilding damaged credit. It is important to make all payments on time, as this will help you recover from your damaged credit.

It is also important for the consumer to periodically review his or her own credit report to make sure there are no errors or omissions contained. Be sure that there are no erroneous late payment or missed payment notifications. If there are problems, be sure to notify the credit reporting agency immediately, and to follow up to make sure that any errors have been corrected.

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