Posted on: 9 March 2017
Bankruptcy isn't the end of the world. Eventually, your credit can be repaired and your financial health can be better than it ever was before. However, reestablishing credit after bankruptcy takes time and effort.
Unfortunately, many consumers make the incorrect assumption that they will never be creditworthy again and don't even try to repair their credit. Any consumer who has declared bankruptcy should be aware that a Chapter 7 bankruptcy only stays on a credit report for 10 years and a Chapter 13 bankruptcy only stays on a credit report for 7 years.
You can repair your credit as quickly as possible after bankruptcy by avoiding the following six mistakes:
Not paying attention to your credit report
If you've declared bankruptcy, there will of course be some negative marks on your credit report. However, there may be some inaccurate marks on your credit report that you can have removed.
Examining your credit report when you declare bankruptcy is a good idea for numerous reasons. First of all, it allows you to look out for any mistakes. Also, it simply helps you to grasp what your current financial situation is and where your starting point is when you're repairing your credit after bankruptcy.
You won't be able to build your credit back up after bankruptcy if you stop using credit entirely. There are many ways you can build up credit after bankruptcy even if you can't be approved for a traditional line of credit. For example, you can get a co-signer for a loan or apply for a secured credit card.
Not focusing on making more money
If you've had to declare bankruptcy, you're having both an income and a spending problem. You're not making as much as you're spending. Increasing your income if possible by taking a second job or working more hours is one part of the solution.
Failing to improve poor spending habits
If you keep spending as much as you did before your bankruptcy, you're not going to be able to turn things around for yourself financially. Work on self-discipline and avoid impulse buying to curtail your spending to a more affordable level.
Beginning to slack on payments again
Financial problems often start with negligence regarding payments on credit cards and loans. Once you've declared bankruptcy, you should set a goal to never again be late on a payment.
Paying for credit repair services
Credit repair services often draw in clients with false promises about immediately boosting credit scores. It's better to consult your bankruptcy attorney for advice about raising your credit score rather than paying for credit repair services. Credit repair is inevitably going to take time, and you should be skeptical of any company that tells you it can be done quickly.Share