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Rebuilding credit should be a focal point after bankruptcy

On Behalf of | Mar 23, 2019 | What Bankruptcy Can Do |

When people hear the word “bankruptcy,” they often associate it with negative consequences. However, for many people, filing for bankruptcy can be the beginning of a fresh start and an opportunity to redevelop their financial foundation to prepare for a successful future. After the dust has settled and a person’s bankruptcy is filed in Tennessee, their focal point should be on rebuilding their credit.

A person’s credit score plays a significant role in whether or not they are able to secure financial assistance in terms of loans. It can also play into their ability to secure an affordable interest rate on various types of insurances. Ultimately, poor credit can prevent people from being able to make large purchases such as a car or home. Because bankruptcy does disrupt a person’s credit and appears on their record for some time, their primary focus, once their bankruptcy is finalized, is to begin rebuilding their credit and taking measures to avoid unnecessary debt from consuming their financial stability again.

According to Experian, credit cards should be monitored carefully to keep debts low or at zero. If people have accumulated credit card debt, they should be timely in paying off those debts as soon as possible. If they create a payment plan with their bank, they should try to pay above the minimum payment whenever they can. Another suggestion is for people to be prompt about paying their bills on or before the required date. Avoiding past-due bills will help boost a credit score.

Wells Fargo suggests that people create a budget and work hard to be consistent in how they manage and spend their money. Once they have identified a budget, they should work hard to not spend above the parameters they have designated. Progress should be monitored to identify areas where improvements can be made.