How to rebuild credit after bankruptcy

Bankruptcy impacts many aspects of your life. One of the areas where it hits hardest is your credit score. Someone with a credit score of 780 prior to bankruptcy, which is excellent, would see it drop around 240 points. Someone with a score of 680 may only see it drop by 150 points. 

Your bankruptcy will remain on your credit report for between seven and 10 years. That does not mean you have to deal with a poor credit score the entire time. After the court has approved your bankruptcy, you can start taking steps to increase it once again. In a few years, your credit score may fall back in the good or excellent range. 

Create a budget for all your bills

You need to continue paying for your utilizes on time. To make sure you do not fall behind, you should create a budget. You should know exactly how much you bring home after taxes each month. You then need to see where you should allocate those funds. Your rent or mortgage and all utility bills need to take priority. You then need to determine what you need to spend on food and other essentials every month. 

Get a secured credit card

You may not feel comfortable getting a regular credit card right after bankruptcy. However, you should at least look into acquiring a secured credit card. It functions like a regular card, but you can only spend however much you put down as the deposit. Every month, you should pay off your credit card in full. You should only ever spend 30 percent of your card's limit every month. 

Keep an eye on credit reports

There are various services available that allow you to view your credit score. You should review these regularly to see where your score is. Over time, you may notice discrepancies on your report. You need to correct these discrepancies before you go buy a car or house. 

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