A job loss, divorce, serious illness or another difficult life situation may have forced you to go into significant debt. And if you decided to declare bankruptcy, this legal filing may have provided a financial way forward.
But one of the effects of bankruptcy is that it can damage your credit score. For example, according to Experian, a Chapter 7 bankruptcy filing will remain on your credit report for up to 10 years from the date that you filed. If you are trying to rebuild your credit score after filing consumer bankruptcy, the following strategies can help.
Keep up with your payments
Once you file for bankruptcy, assess your budget and determine how to make all your payments on time. This will show lenders that you are financially responsible and capable of following through on your debt payments, which can increase your credit score.
Start using credit again
While you may be wary to use credit again after filing for bankruptcy, this can help you build your credit score. Consider having someone co-sign on a loan with you or applying for a secured credit card.
Watch your credit report
Reporting errors on your credit report can negatively impact your credit score. Obtain copies of your credit report every few months, look for any discrepancies and work with your creditors to fight any errors.
As you work on rebuilding your credit score after bankruptcy, remember that this process takes time. But by developing good financial habits, you can not only increase your credit score over time but feel more confident from a financial perspective.