When you file for bankruptcy, you likely do so in an effort to eliminate overwhelming debt and get your financial affairs back on track. While filing for bankruptcy can help many people accomplish this, it can also impact the credit of those who file, and if you are among them, it would serve you well to start rebuilding your credit after your bankruptcy filing so that you can, one day, secure loans, credit cards and so on.
So, just how might you go about rebuilding your credit after bankruptcy, and what types of steps can you take to speed up the process?
Take out a secured credit card
Unlike a traditional credit card, a secured card requires that you put down a deposit, and then you can typically only access the amount of money you included in that deposit. While a secured credit card can, like other credit cards, help you build credit, there are generally higher fees and interest rates associated with this type of card, so you may only want to use yours for a limited time.
Take out a secured loan
You may also be able to boost your credit score after bankruptcy by taking out what is known as a secured loan. There are several different types of secured loans. The first type involves you putting down a deposit, and then borrowing against that deposit. The other involves having money entered into a savings account which you can access after making the proper payments. Both types of secured loans can help you rebuild your credit after a bankruptcy filing.
Get a co-signed loan or credit card
If you have a friend or family member who trusts you and who also has good credit, consider asking this person to co-sign on a credit card or loan on your behalf. If you do not stay current on your payments, though, this person can become responsible for your debts.
Rebuilding credit after bankruptcy takes time, but it is a necessary and important step in the process of getting your finances back in a more manageable state.