Bankruptcy sounds terrifying indeed but that doesn’t mean that it’s all gloomy. Did you know that there are studies that claim that within 1.5-2 years of filing for bankruptcy, there are individuals who have increased their credit score to 650? When such borrowers went out to take out a home mortgage loan, they only had to pay 18 basis points more on the interest rate as compared to those who didn’t declare themselves bankrupt.
The fact is that bankruptcy can subject you to challenging situations but it can also be the best opportunity to Press the Restart Button and make a turnaround. So, if you think you can’t start afresh after declaring bankruptcy, here are a few key points for you to keep in mind.
- Be well-informed about the details of your credit report
Did you know that https://www.freecreditreport.com/ offers a free credit report once a year? Now that you have filed for bankruptcy, it is even more crucial to stay on top of your report. You have to ensure that your report reflects that you’re no longer responsible for any debt that was eliminated through bankruptcy. You should make it a point to keep a tab on your credit report.
- Own your previous financial blunders
Instead of repeating the same errors that you’ve committed before, it’s high time you identify your mistakes and resolve to never repeat them. Did the credit card companies lure you into taking out high-value loans and did you give in to that temptation? If you did, you should not steer clear of high-interest credit loans. Were you a person who never followed a budget? If yes, you should now follow a realistic budget and stick to it.
- Keep credit repair scams at bay
Once you file bankruptcy and your name is entered into the government papers, you will soon be besieged with credit repair offers. You have to be careful and aware of the fact that most of these companies are scams. They’ll ask for upfront payments, and never inform you about your legal rights, or tell you about not contacting the credit reporting firms. In case you have any doubt about a credit repair offer, don’t hesitate to get in touch with the FTC or your State Attorney General’s office.
- Boost your credit portfolio
The different kinds of loans that are included in your credit file constitute your credit portfolio. Whether or not you’re able to manage this blend will have a direct impact on your credit score. If you make timely payments to the credit reporting agencies, utilize firms like RentReporters or RentTrack to report these payments on time. These steps can boost your credit by 70-80 points. You can also take out small credit builder loans through which you can build up confidence and heighten your money-management abilities.
So, if you’re concerned about starting afresh after filing bankruptcy, you should keep in mind all the above-mentioned tips. Build your credit and change your lifestyle.