Bankruptcy can help you dissolve or eliminate unmanageable debts. This can be a valuable lifeline if you struggle with debt that you may not be able to pay off, and it is a common experience for many.
According to the United States Courts, in the 12-month period prior to June 30, 2020, 682, 363 bankruptcy filings occurred. One of the consequences of filing bankruptcy is that it can damage your credit, but the following strategies can help you rebuild your credit score after you file.
1. Stay current with payments
You may still have a few debt payments to make after you finalize the bankruptcy process. Determine which accounts hold debt still and figure out exactly when you need to pay them. You should also be diligent about making all your bill payments.
2. Open new credit accounts
It may be harder to get approved for credit after filing bankruptcy, but you should still try. Opening up and using a new credit card, for example, even with a higher interest rate, or trying to secure a small loan, can give you the opportunity to build up your credit once more.
3. Maintain low credit balances
Do not use your entire line of credit when you have a new credit card. Instead, keep your balances low to indicate to lenders you can repay what you borrow.
Improving your credit score after bankruptcy is not something that happens overnight. Instead, it can occur after continued diligence and sticking to responsible debt repayment strategies