Rebuild your Credit

Once your bankruptcy has been discharged, concentrate on rebuilding your credit. Below are 12 helpful hints on improving your credit score and obtaining a happy financial future.

1Check your credit report on a consistent basis
Review your credit report often to ensure all of the information is accurate.

2Keep your House and Car
If you choose reaffirm your mortgage and auto payments, you will get credit for keeping the loan, and timely future payments on large obligations go a long way to improve your credit.

3Apply for a credit card
Obtain either a secured or unsecured credit card and repay the balance in full each month. This helps establish a pattern of timely payment history and improves your credit.

4Pay everything on time
Most importantly, make sure to use your fresh-start wisely and make all your payments on time each and every month. Filing bankruptcy will give you a second chance, but it’s much more difficult to improve your credit if you repeatedly fall into financial problems.

5Open a checking/savings account
Maintaining a checking or saving account in good standing shows your creditors that you are successfully managing your finances. Building a relationship with a local bank or credit union may also lead to a loan in the future.

6Save
If feasible, start putting away a percentage of your monthly income into a savings account. This money can be used as a down payment or as collateral for a future loan.

7Get a cosigner
You are much more likely to get lower interest rates and better loan terms if a family member or close friend cosigns for you.

8Track your expenses
Track all of your expenses for 2 complete months and you should get a good estimate of your spending habits. You may be surprised at what you find and might easily be able to pinpoint unnecessary monthly expenses that can quickly add up.

9Create a budget
After you’ve tracked your expenses for 2 months, create a budget by deducting your monthly expenses from your monthly income. If your budget does not show enough disposable income to meet your financial needs, you’ll need to determine how to either lower some of your expenses of find additional sources of income.

10Spend control
Sticking to your budget is critical to your financial well being. Consistently spending more than your budget allows is a recipe for debt. Avoiding charging and strictly following your budget will prevent overspending.

11Create an emergency fund:

Create an emergency fund in an interest bearing savings account. Emergency funds are essential because no matter how good your budget and spending control is, there are some things that you can never plan for. These emergencies can be devastating to your credit if you don’t have readily available cash.

12Fund Your Retirement:

Once your emergency fund is established, start contributing towards a retirement plan or an IRA.