When you have declared bankruptcy, one of the first things you will want to do is to start right away in repairing your credit. While bankruptcy may seem like the biggest strike you could possibly have against you in attempting to rebuild your credit, it actually is the first step in rebuilding it, and can be turned around to be in your favor. Here is how you can make your bankruptcy work to your advantage so that in the long run, you may have better credit than you have ever had before.
The first thing to remember is to be patient with yourself. You will not be able to go from bankruptcy to a credit score over 800 in one day, or probably even in a year. Take your time, and rebuild one credit card or loan at a time. Eventually, you will have a fantastic credit score, as long as you are careful with your credit and your credit applications.
When your bankruptcy is final and all of the extra paperwork has been dealt with, this is the time that you need to start rebuilding your credit. Start with a small credit card, secured if necessary to get you back on the road to good credit. If you do not want to have a secured credit card, you can try to get a credit card from a department store. Stores such as Target are often good about giving people a second chance with credit. Just start with one credit card and make sure that you are paying on it every single month. When you are comfortable paying that bill every month, and you have enough income to handle a second bill, that is when you can apply for more credit. Just take one credit card or loan at a time rather than taking on several at once, and make sure that when you pay your bill, you always pay more than the minimum at least, and try to pay it off each month.
As you become better and better about paying your bills, this is when you can add things like a car loan. However, when you buy a car, do yourself a favor and pay a high enough down payment that you will not be upside down the moment you drive off the lot. If you can avoid a car loan altogether, that may be better for you personally, but not necessarily better for your credit. Even on the car loan, however, try to pay it off as quickly as possible so that it will look good on your credit and you will not have that bill hanging over you for very long.
Home loans are a little bit trickier to get, especially in today’s market. However, if you make sure that you have built your credit after bankruptcy to the point where you now have impeccable credit, and you save your money so that you can come up with a good down payment on a home, you are likely to find that you can afford a beautiful home for yourself as well.
Just remember, bankruptcy is not supposed to be the end. Bankruptcy is meant to give good people a new beginning, so that they can start over, and pay their bills on time, and still be able to live the American dream.