After Bankruptcy

After bankruptcy it can be overwhelming trying to think of what to do next. During the process you were probably told many times this is your fresh start- and it's true! At least, it's true as long as you have a plan on how to make it so. If you don't take control and jump right into building your new, positive, credit history then your “fresh start” can easily start to feel like the old one. So, let's explore how you can take control.

The first thing you absolutely want to do is get a copy of your credit report. Look it over carefully and make sure that everything included in bankruptcy is marked as such and not open or overdue. If it's not how it should be then you are going to need to contact the companies and keep talking to people there until this is taken care of. A lot of people have unnecessary shame with their past financial troubles and this stops them from taking care of this important step- don't let that stop you! The next thing you want to do after bankruptcy is shop around for a secured credit card. These are very similar to the unsecured cards of your past, but with a much lower limit. When you apply you deposit a few hundred dollars into a savings account which the bank will use as collateral and in the event that you fail to make payments the bank will collect their money from the account. When you look for a card make sure to aske that the company reports to the three major credit bureaus; Equifax, Experian, and TransUnion, or all your efforts are doing you no good. The card also needs to have the option to switch to an unsecured card after 12-18 months of on time payments, and there should be no application fee. The annual fee should be reasonable. I recommend searching around to compare rates. Once you have your new card, use it lightly, not passing 30% of your credit limit, and pay the balance in full each month. Once you have this going for you, you should look into obtaining some kind of loan- assuming you don't already have some that weren't discharged. You can find a car loan, student loan, or other form of small financing. Paying this off will help you build your credit history.

Hopefully you can make all this happen in a two year plan and have a real good credit score to your name by that point. Life hasn't stopped, and neither will your finances. Be bold and take control of your finances right after bankruptcy.