Rebuilding Credit After Bankruptcy.

Filing for bankruptcy can definitely make it tough to get credit, but there are steps you can take to start rebuilding your credit today. Not only will making these moves help you get the credit you need personal installment loans or other financing, but they can also put you on a stronger financial footing for the future.

Bankruptcy doesn’t have to be a credit killer.

If you’ve filed for bankruptcy, you might think it’ll be impossible to get a credit card or loan in the future. But that doesn’t have to be true if you take some small steps to start rebuilding your credit and manage your finances carefully. Even if you don’t want a credit card or to get a loan today, rebuilding your credit is important. Employers, insurance companies, and landlords often look at your credit score to decide whether to hire, insure, or rent to you.

How to rebuild your credit.

Below are the first steps you should take to get back on the path to good credit.

1. Make a budget:

It’s important to know how much you make and how much you need to pay your bills. There are online budget tools or you can just make a list of how much money you make each month and how much you spend on:

• rent or mortgage payments
• groceries
• gas and electric
• cable
• Internet
• cell phone
• transportation (bus or subway fares, parking, car payments and insurance)
• loan payments
• credit card payments
• child care
• health insurance

There are several steps you can take to put yourself back on the path to good credit.

2. Start an emergency fund:

Big, unexpected expenses like doctor’s bills and home and car repairs can hit your budget hard. Even if your budget is tight, put a little money from every paycheck into a savings account so you have some cash in an emergency.

3. Check your credit report:

It’s good to know where you stand. You can get a free credit report once a year from all three credit bureaus. Visit the official website to request your reports. This is the only website that provides the free annual credit report, so be careful of other sites with similar names that charge for the reports. If there are errors on your reports, write to the credit bureau and dispute them, because incorrect information can affect your ability to qualify for credit and be approved for loan financing.

4. Apply for a secured credit card or a retail card:

With a secured credit card, you give the card issuer a deposit, then you can make charges up to a certain percentage of the amount you deposited. Be aware, however, that some of these cards charge annual fees and have high-interest rates, so check the details carefully before applying. Gas station and retail or store credit cards often have less tough credit score requirements, so it may be easier to get this type of card after bankruptcy.

Since you’ll be using these cards to rebuild your credit, make sure you pay off the balance in full and on time every month and don’t charge up to your card’s limit. When applying for a secured or retail card, ask if they report your monthly payments to the major credit bureaus. If they don’t, they won’t help rebuild your credit.

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