How to Repair Your Credit After Bankruptcy

This article looks at a commonly asked question by those who have declared personal bankruptcy: how to repair your credit after bankruptcy?

There are those who have allowed their personal finances to get completely out of control. They amassed so much debt that they lack the ability to pay it back. For those who find themselves in this dubious position there is one option open to them, bankruptcy.

The reasons why people turn to bankruptcy are many; sometimes they lost their jobs, or suffered an injury or were just horrible irresponsible when it came to their discretionary spending. Whatever the reason, bankruptcy can become a last resort. The question is what you do after a bankruptcy, more to the point – how do you repair your credit after bankruptcy?

During a bankruptcy there is very little you can do. As a stipulation of your bankruptcy, you are strictly prohibited from acquiring any new lines of credit without prior approval from the bankruptcy jurisdictions permission. This can prove beneficial in credit repair after bankruptcy because you are beginning to establish a stronger pattern of on time payments, which will be reflected in your credit report.

This can take a fair amount of time considering a bankruptcy will remain on a credit report for 10 years but anything is better than nothing is. Repairing your credit after bankruptcy is much more dependent on your willingness to change.

Credit repair after a bankruptcy is, in a way, like starting all over again. Those who had to resort to bankruptcy because they could not control their spending might find this process quite challenging.

The key in fixing your credit after bankruptcy is to take things slowly. It is highly undesirable that after a bankruptcy you will receive offers for large lines of credit with low interest rates. Those are typically left for the people with good credit, where as you will technically have none.

Establishing a good record of payments go a very long way to increasing your credit score. It may not be a bad idea to get a credit card, one with a lower balance would be preferred. This may not be too much of a problem considering you have no credit and most credit card companies are unwilling to bestow a large line of credit to an unproven borrower.

For continued success in credit repair after bankruptcy, it is advised to watch for an increase in balances. A good rule is to put on a credit card only what you can afford to pay off at the time the bill is due. Most important is to pay those bills on time. On time payments represent around 30% of your entire credit score.

The key to real success in how to repair your credit after bankruptcy is common sense. Do not spend more than you can afford to. Watch your money; know what you can and what you can not spend. With time and a level head you can avoid the pitfalls of the past and become an expert in credit repair after bankruptcy.

Source by Louis Z.

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