Restoring Credit After Bankruptcy: Mistakes To Avoid
Whether you are an individual or a business, after going bankrupt, you may find yourself in great difficulty in going up the slope and rebuilding your credit. Even if most financial institutions refuse to grant you financing because of your bad credit history, do not give up, because solutions to rebuild your credit easily do exist. Now you just need to avoid some mistakes and be patient.
Bankruptcy Affects Credit
Personal bankruptcy is usually the last resort for a person who is experiencing serious financial difficulties that they can no longer cope with. It is a facilitating solution which however has significant negative consequences on the credit rating. Indeed, bankruptcy makes the credit rating at the lowest for six years if you do not take action to rebuild your credit rating.
Do not change your financial habits
Because some bad habits or recurring oversights have led you to go bankrupt, one of the biggest mistakes you can make is to miss your payment deadlines again. Indeed, if you want your credit rating to improve, you have to organize your payments so that you don’t miss a single one. Make sure you don’t fall behind on your electricity, phone, etc. bills. Also try to pay your bills and expenses like your rent at least three days before the payment deadline, as these are the little things that will make receivers like your landlord provide you with new good references. Not changing your habits would also mean postponing your credit repair or making further purchases, which can worsen your situation and tarnish your credit report, which is the key, to get new financial credibility.
Quickly apply for a new regular credit card
Contrary to popular belief, it is possible to get a credit card after going into personal bankruptcy, because going bankrupt is like a second chance since you can no longer go bankrupt for the next 6 years. Besides, the proper use of a credit card is one of the ways to rebuild your credit rating. Without a credit card, it can be very difficult to repair your credit. However, it is highly risky to apply for a new regular credit card. You can then apply for a so-called secure credit card which is the best option to help you restore your credit flexibly. The secured credit card with collateral is used like a conventional credit card, but it imposes a limit according to the amount that you leave as collateral in order to prevent you from falling into overdraft. In addition, each of the deposit amounts posted on your credit report. However,and learn from your financial mistakes.
Another mistake to avoid is that of cloistering yourself in your home and not living properly after going bankrupt. If you need to top up your credit and you need a car to get around and go to work, think about a personal loan or car loan which can be the solution to help you take matters into your own hands and so to overcome this bad phase .