After you’ve been through a bankruptcy, it’s time to think about rebuilding. It’s a process, but if you are careful, you can get there. Follow these steps, and you will soon improve your credit score, which is critical for buying a car, renting or buying a house and functioning in a myriad of ways in our society.
Make and keep a budget
Only by tracking your money can you be sure that you never spend more money than you make. Look at your monthly expenditures, your bills, your bank statements and create a plan you can live with.
Put aside 5% to 10% for savings and emergencies.
Pay all your bills on time
These would include utility bills, mortgage, credit cards (once you have credit cards again) and debts that survived your bankruptcy such as student loans.
Avoid borrowing until you build up your credit score a little
If you immediately go out and try to borrow, you are likely to be asked to pay very expensive rates. Until you credit score is over 650, you will be given very disadvantageous rates.
Open a new account at the bank
Creditors like to see that you are trying to rebuild financial stability by opening a new checking or savings account. Consider signing up to have your bills paid automatically to be sure they are paid on time.
Don’t Fall for Con Artists Who Prey on People with Low Credit Ratings
You may find yourself inundated by offers to loan you money at ridiculously high rates. Don’t fall for it.
Watch your credit score
Though you might find it painful to do so, it’s imperative that you track your credit score. Get credit reports from the big three: Equifax, Experian and TransUnion. Check them for accuracy. If you find errors, file a dispute immediately.
Get a secured credit card
This was addressed in our recent blog post, Understanding How Bankruptcy Affects Your Life. The offered rates may be high, but getting a secured credit card will help you rebuild your credit.
Get a gas or a store credit card
After you have a secured credit card and have been paying that regularly, the next step is to get a gas or a store credit card. Make sure you pay on time every month, and we recommend paying it in full. We also recommend not getting a card that might entice you to splurge.
Don’t close accounts
Payment history and how much you owe in comparison to how much credit you have are important parts of your credit score. When you close an account, you decrease your credit limit and lower your credit score.
The highly experienced and reputable Los Angeles bankruptcy attorneys at Vokshori Law Group have helped thousands of people with all aspects of bankruptcies and we can help you rebuild your life. For further information or to schedule a consultation contact Vokshori Law Group at 855.855.2608 or visit www.Voklaw.com.