Filing a bankruptcy can be a stressful experience. However, that does not mean the end of the world. You can think bankruptcy as the opportunity to make a fresh financial start since all your debts are discharged. All you have to do is to not repeat the same things that led to bankruptcy and learn how to manage your finances properly. Here are the ways which you can follow to recover from bankruptcy and make a good start of your financial life.
1 Find out the reasons that led to bankruptcy
In order to recover, at first, you need to find out the reasons for which you had to file a bankruptcy. It might be the fact that you did not plan a budget or even if you had a budget, it did not work on your favor. Therefore, revisit your budget and plan a new one in order to save more every month. If required, you can consult a non-profit credit counseling agency, wherein a credit counselor, can assess your financial condition and offer you tips to manage your finances in a better way. You can follow these tips to improve your financial situation.
2 Check your credit scores from 3 credit bureaus
Before you start applying for new credit, you should check your credit scores from each of the 3 major credit bureaus, namely, Experian, Equifax and TransUnion. You should also pull your credit reports from the 3 bureaus and check whether or not there is any incorrect information in your reports. If there’s any incorrect information, then dispute it with the specific credit bureau. You can do it by filling out a form and support it with necessary documents.
3 Set your financial goals
It will help you stay motivated if you set your financial goals. Just set achievable goals with a definite time period, such as, buying a home as soon as possible, buying a car or saving a certain amount within a year, etc.
4 Start re-establishing your credit
To recover from bankruptcy, all you have to do is start re-establishing your credit. Here are 2 ways by which you can re-establish your credit record.
5 Obtaining a secured credit card
This is perhaps the best option to re-establish your credit. You can obtain such a credit card from a bank or a credit union. To take out a secured credit card, you need to deposit a certain amount in your bank which will be your available credit limit. You can use this card to make a purchase and make the monthly payments on time, and it will get reported in your credit record. Therefore, remember to make the monthly payments on time.
6 Take out a gas or a retail credit card
Though it might be difficult initially to take out a gas or a retail credit card, yet you can check out whether you can get one. However, while doing so, remember that whenever you apply for a new credit, there’s a hard inquiry in your credit report. Therefore, do not apply for a number of credit cards at once. You can go through the offers, select some and approach one company at a time.
While trying to reorganize your financial life, you need to be patient and think positively. As already mentioned, a bankruptcy discharge helps you make a fresh start since all your debts are cleared. So, take advantage of it and start making your monthly payments right on time. With time, you will be able to establish a good credit record and achieve a high credit score, which in turn, will help you to obtain loans at suitable interest rates and enjoy a good lifestyle.