If you've recently gone through a debt relief process, such as bankruptcy, it may take some time before you feel like your head is clearly above water again, financially-speaking. Remember that you are definitely not the first person, nor will you be the last, to encounter a temporary financial setback in life. There are several proactive steps you can take to begin rebuilding your financial foundation, especially your credit score.
For one thing, it often helps to talk to others who have gone through similar experiences. A friend or family member may be able to offer practical tips to help you steer clear of further financial problems in the future. As you research different ideas for increasing your credit score following bankruptcy, keep in mind that there are support resources available in case you run into trouble.
Change poor credit to good
It's a bit of a catch 22 when you first begin to restore your finances following a major setback or bankruptcy. That's because many creditors may be hesitant to loan you money knowing that you recently navigated a bankruptcy process. The following tips may be useful as you try to rebuild your credit:
- Periodically reviewing your credit reports may alert you to errors or other factors that can help improve your credit rating. For instance, if debts listed on your report are older than the accepted reporting timeframe, you can request to remove such information from your credit report.
- Paying bills in a timely manner is a basic, and usually easy, way to rebuild your credit. Showing that you are able to promptly satisfy recurring debt is a definite move in the right direction.
- You may be able to obtain a secured credit card as well. This works like an average credit card; however, your amount of credit equals the deposit you place on the card. Request that your secured card issuer reports your payments to all credit report bureaus.
- If you can show proof of income and ability to repay a loan, a community bank or credit union may be willing to extend a small loan for the purpose of helping you re-establish credit.
A close friend or family member may also be willing to co-sign a loan on your behalf. The point is that you are not without options when it comes to restoring your good standing among credit bureaus following a major financial crisis. You may be able to restore your credit in as little time as one year if you implement constructive options and establish a strong network of support to help you along the way.