Filing for bankruptcy is a major decision for some people. They realize that they can’t handle making payments on their debts while keeping up with their basic life necessities. One of the questions people who file for bankruptcy often ask pertains to rebuilding their credit after the bankruptcy is over.
Bankruptcy is a way to have a fresh financial start, so it’s possible to rebuild credit. It’s critical that nobody in this position tries to rush the process. A person who has an open bankruptcy typically can’t open new credit accounts, which means that they can’t apply for credit cards or take out loans until the bankruptcy case is closed.
How can a person rebuild their credit after bankruptcy?
One of the best options for rebuilding credit after a bankruptcy is to start off with a secured credit card or a credit building loan. These are typically backed by funds from the borrower, but the account holder is still expected to make payments. Some of these eventually move the person to an unsecured account once they make their payments on time for a specific amount of time.
Remember that the bankruptcy remains on a person’s credit report for a specific amount of time. That’s a good time for them to work on trying to boost their credit score, but they must also ensure that they’re complying with the terms of the bankruptcy. After the bankruptcy is discharged, they can use the things they learned during the educational courses they had to take. It may behoove them to seek the assistance of someone familiar with the bankruptcy process to ensure they’re doing everything properly.