The reasons why people turn to bankruptcy are many; perhaps 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 courts permission. This can prove beneficial in credit repair after bankruptcy because you are beginning to establishing a stronger pattern of on time payments, which will be reflected in your credit report.
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 unlikely 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 might not be a bad idea to get a credit card, one with a lower balance would be preferable. This might 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 advisable to watch for an increase in balances.