Getting Credit Repair After Bankruptcy
by Paul McDermott
When people live in a free market economy like America, good and bad can result as a direct consequence of people's actions. Some people may mass large sums of money while others may become bankrupt.
Just because you made some bad choices in the past, if you are really serious about it, you can repair your credit after declaring bankruptcy. In fact you will save a lot of money over time in interest charges by improving your credit score.
It is not a good idea to immediately apply for unsecured lines of credit. You are likely to get rejected at best, which will show up on your credit history, and keep your credit score low. You might get accepted, but you will probably pay much higher fees and interest rates. One thing to consider is getting a secured credit card, where your credit line is determined by depositing cash into your account as collateral.
Even with good use of your finances, it can up to ten years to get your credit back to a normal level. It may seem like a long time, but the benefits can be tremendous in terms of money saved. And when you consider that you have just had your big debt balances erased by bankruptcy, this is still a better situation than before your bankruptcy.
Some Steps For Credit Repair After Bankruptcy
Now don't hit your computer screen, but now that you are starting over, it is a great time to get a realistic financial picture, and that includes making a budget. I know, it makes my eyes glaze over, but once I knew where my money was going, I could make my financial goals come true. Without it you will just drift and make no progress.
Next, put some money aside via automatic deposit for emergencies and future planned expenditures like a house, college for your kids and retirement. Then plan your purchases and avoid impulse buys. If you really have a weak moment and buy something unplanned, use cash. Remember, you don't want the suffocating feeling of drowning in debt again.
If impulse buying was what got you into trouble before, find a way to short circuit that tendency. Aren't at least a little mad at yourself and the finance companies for your previous debt problems? Resolve to keep them out of your life this time. One good trick is to wait a day to buy that thing you think you just have to have. You will find that almost always the urge goes away.
Lastly, find a spiritual outlet. Get in touch with that part of you that knows more things won't bring you lasting satisfaction. As you resolve to live more genuinely, and treat your finances more maturely, your credit will automatically improve after your bankruptcy, and before you know it, your credit score will be back toward normal.
Paul McDermott shares his experience with repairing credit after bankruptcy and other personal finance lessons, some learned the hard way, at Credit Repair. Get your own completely unique content version of this article.
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