Image courtesy of Stuart Miles / freedigitalphotos.net |
Once your bankruptcy is completed, you have a unique
opportunity that not many people get—the opportunity for a fresh financial
start. The best way to use this opportunity
to your advantage is to make the right financial choices from this point
forward.
1. Create a budget
and stick with it.
Making a livable budget is the first (and most important
step) to getting back on track financially after a Chapter 7 or Chapter 13
bankruptcy. Showing your potential
lenders that you have learned your lesson and are able to make smart financial
choices is best done through living within your means and knowing where your
money is going at all times.
2. Learn to live on
cash (or your debit card) again.
After a bankruptcy, cash is your friend. Not only does cash allow you to stick to your
budget better (since it’s a tangible reminder of how much you have to spend
each month), it also helps you get out of the credit habit. This doesn’t mean that you should avoid
credit entirely, though—in fact, you’ll need to re-establish some credit in
order to get your credit score back on track after the hit it takes from
bankruptcy.
3. Pay your bills on
time, every month.
Keep in mind that even the small bills will show up on your
credit report and affect your score.
4. Keep a close eye
on your credit report.
The only way to ensure that your credit is getting back on
track is to watch it closely. A good way
to do this is to sign up for a credit monitoring service.
5. Get a credit card
and use it wisely.
The only way to re-establish your credit is to obtain
credit and use it wisely. While it might
be difficult to obtain credit initially after your bankruptcy has been
discharged, many cards offer low credit lines to people with poor credit with
the opportunity to raise those credit lines after demonstrating over a period
of a few months that it will be used wisely.
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