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How to Rebuild Credit After Bankruptcy

Sometimes bankruptcy is inevitable. Making the minimum payments on your credit cards is never a good sign.
Richard Clayton Oct 3, 2019
If you are getting calls from bill collectors and when your finances are consuming your every thought, a bankruptcy lawyer is likely the only answer.
The process of filing and recovering from bankruptcy can be complicated. For most the scariest thing is the damage it does to their credit. If you are concerned about rebuilding your credit after a bankruptcy, there are some small things you can do to help yourself.

Check Your Credit Report

Monitoring your credit is an excellent idea, regardless of your financial situation. Studies show that 25% of consumers report errors on their credit report. If you’ve just undergone a bankruptcy, you literally cannot afford to be one of the 25%.
You are entitled to one free credit report every year. And you can claim this report at Annual Credit Report. Don’t fall victim to other companies that charge you. Use the free monitoring system and check for errors.

Open a Credit Card

This might seem like a Catch-22. Credit problems got you into this mess, and now we are advising you to open a card.
Start with a retail store card. They have very liberal requirements, and using it will help you establish good credit. Be cautious, though! Only open a card that has a limit you can afford to pay off. And, don't open several cards and run them up.
Use the card if you have cash in hand. Charge what you need, then immediately pay it off. With banking apps and online bill services available today, you can literally do this on the phone while you are checking out. Pay with the card, and then immediately use your phone to pay off the card.

Ask for Your Payments to be Reported to the Credit Bureau

If you are making monthly payments to a landlord, ask him/her to report your payments to the credit bureau. It can only help you, and it should only take your landlord a few extra minutes of the day to send the information off.
If your bankruptcy has put you in a position where you had to use a service like Rent-a-Center or something similar to get your furniture and TV, ask them to report your payments as well. The more you get published, the more your credit score is boosted.

Become an Authorized User on a Credit Card

This might be a hard pill to swallow but ask your parents to put you on their card as an authorized user. They don't have to give you their card. Merely attaching your name to an account that is consistently up to date can do wonders for your credit score.

Conclusion

Deciding to file for bankruptcy is not an easy choice. And, recovering from it is even harder. Hard does not mean impossible. You can improve and rebuild your credit. Small steps like frequently checking your credit report, becoming an authorized user, having payments reported to the credit bureau, and opening a retail card are all excellent starts.
Financial mistakes do not have to define you. How you handle them is simply an opportunity to learn. So, don’t stress out about your bankruptcy.  Accept the fact that you need help managing your money. Then, try some of the suggestions given to start repairing your credit.