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Bankruptcy has earned a bad name because it causes a big dent to your credit report, which many people fear is irreparable. However, Dallas based bankruptcy law firm Recovery Law Group say, nothing can be further from the truth. Bankruptcy does have negative effects which make people vary of filing for bankruptcy despite struggling with debts. Bankruptcy appears on your credit report and stays for 7-10 years depending on which chapter of bankruptcy you have opted. This may alert prospective creditors of your financial situation. However, if you think you won’t get any credit for this duration, you are wrong. With a few simple steps, you can start building your credit score, eventually getting a good score in as less as 2-3 years after a bankruptcy discharge.
- Opt for secured credit card
Once you are through with your bankruptcy discharge, you will have the option of secured as well as unsecured credit cards. Prefer a secured card with a limited balance. You can use it to pay for essentials like utility etc. While choosing from the numerous options of credit cards available, look for those which have low-interest rate and annual fees. Generally secured credit cards provide you these options.
- Pay your bills on time
Paying due bills on time is an excellent way to improve your credit score. You need to make sure that not just credit card bills, but also other bills are also paid on time as any late payment will affect your credit report negatively.
- Live within a stipulated budget
People can change their habits. It is important that you learn from your past mistakes, let go of your bad habits and develop new ones that include designing a budget and living within it.
- Apply for limited credit
Remember that lots of credit cards and unlimited credit amount landed you with bankruptcy. Therefore, always limit your credit in order to avoid the vicious cycle of debt and bankruptcy. before applying for any new credit, ask yourself whether you need it or not. additionally, do proper research before taking any new credit.
Rebuilding your credit score is not as difficult as predicted if you are determined to go through with it. Keeping your goals in mind, it is vital that you go in the right direction. Experienced bankruptcy lawyers at 888-297-6023 can help you with different aspects of bankruptcy as well as credit building initiatives.