There are a lot of misconceptions about bankruptcy. A lot of people think that it will ruin their financial lives forever, and that it destines them to a life with nothing. This is far from the reality of what bankruptcy has to offer. In fact, each year millions of Americans choose to pursue bankruptcy because it offers them very real debt relief while allowing them to retain assets that are exempt from the bankruptcy process. This leaves them with the stability they need to start a fresh chapter of their lives.
Concerns Regarding Credit Scores
Yet, even with this realization, many people who are considering bankruptcy fear that their credit score will simply make life too difficult moving forward if they choose to pursue bankruptcy. It’s true that your credit score will take a hit by filing for bankruptcy, but there are things you can do to improve and rebuild your credit score post-bankruptcy.
Ways to Rebuild your Credit Score
Here are some steps you can take to rebuild your bankruptcy:
- Continue to pay bills that weren’t subject to bankruptcy on time. After successfully pursuing bankruptcy, you should have the resources you need to devote to these other outstanding debts.
- Secure new credit. You’ll want to show that you know how to deal with credit if you want to rebuild your credit score. Obtaining new credit cards can help if you’re careful. Consider what may be considered minor credit cards, such as those used to purchase gasoline or clothing. Keep your balances small and make all payments on time.
- Keep steady employment. This helps show that you’re financially stable and able to pay off debts.
- Seek out a co-signer, if needed. A co-signer can help you secure credit if you have trouble getting it on your own. But as with all credit, you should do this sparingly so that your credit report doesn’t look like you’re overstretching yourself.
Just taking these small steps can make a huge difference in rebuilding your credit score post-bankruptcy. So, don’t let this aspect of bankruptcy deter you from seeking the debt relief you need and deserve.