Many people want to avoid filing for bankruptcy for as long as possible due to the impact it can have on their credit score.
However, it is a great way to get a clean financial slate, and the damage it causes is temporary. It is even possible to work toward fixing it right away.
Pay your bills on time
Experian discusses ways of repairing your credit after filing for bankruptcy. First, keep in mind that paying bills on time is a great way to boost a credit score. Automating recurring bills is one great way to ensure that everything gets paid on time. Banks will often automate on a person’s behalf, using their funds to disperse across the different bills they have.
Opt for a secured credit card
Next, consider getting a secured credit card. This type of credit card requires a down payment, which the card company can use as collateral if the card owner fails to pay their bills. A person should use secured cards like a debit card, only spending what they know they have and always paying off the bill on time and in full.
Establish your savings fund
Finally, establish a savings fund. This allows a person to avoid making any extremely high purchases via loan or credit card, which can easily lead to bigger financial problems.
In most cases, bankruptcy will remain on a person’s record for ten years after filing. During this time, a person can start building better financial habits and prevent themselves from ever falling back into the debt that got them to file for bankruptcy in the first place.