4 Important tips for starting over after bankruptcy

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4 Important tips for starting over after bankruptcy

If you’ve recently made bankruptcy filings You may not be aware of what your next steps will be. It is a lengthy and tedious process, which could exhaust you. But, you have to keep going by following these steps to aid you in the process of rebuilding your life after bankruptcy at BankruptcyHQ.

In the end, bankruptcy isn’t the end consider it the chance to begin again. It can take time to build your credit score, but implementing the right habits will allow you to advance and get better so you can obtain the funding you require in the future. When you are doing so, take note of these guidelines for starting again following bankruptcy.

1. Save all the files from bankruptcy settlement

The first step to do when you are starting from scratch after bankruptcy is getting organized. No matter if you save the documents digitally or make physical copies, you’ll require an accounting of your settlement.

It is crucial to keep track of the repayment of any debts which may be included. In the future, you might be required to provide this information when you apply for credit, for example, mortgage. A debt collector could also contact you to inquire about information, and you’ll need to have it in your wallet.

2. Set up an emergency fund as well as a budget

Understanding the fundamentals of financial planning is crucial, but it’s more essential when you’re starting from scratch following bankruptcy. If you already have one of these this is the ideal moment to revisit these.

It is the first thing to do: set up your emergency savings account. If you don’t have one, you can open an account with high yield to earn interest, and then separate the account from your checking accounts. This might make it less appealing to draw it out in an emergency. The second step is to make sure you have an established budget. You can utilize an app or program for budgeting to ensure you are on the right track or employ a budgeting technique such as the 50/30/20 principle.

3. Make sure you check your credit report

It is the next stage getting acquainted with the credit report. First, you’ll need to ensure that the debt that was included in the bankruptcy report is included in the report(s) because bankruptcy is designed to ease the burden of debt. If it’s not in your report, creditors will assume that you have more debt than what you actually have, which could hurt your credit score.

Furthermore, you must continue to keep an eye on the health of your credit report on an ongoing basis. When you are paying off additional debts and make repayments on those credit cards you’ll need to ensure that these transactions appear on the credit report. If they aren’t, it could be worth requesting a dispute to the agency that is maintaining the report. Keep in mind, however, that you can only request a full credit report for free once a year from AnnualCreditReport.com for each of the three credit reporting agencies.

4. (or rebuild) good credit. (or rebuild) credit that is good

After you’ve mastered the fundamentals then it’s time to begin building credit. The steps listed are similar to how they would be without filing bankruptcy. Find out four helpful tips on how to go about this.

Make your payments at the time they are due

In the process of building your credit score, avoiding payment in arrears is one of the most important things to do. Credit scores attempt to determine the probability of repaying the credit. Paying on time is the most effective way to demonstrate that you’re likely to pay back your debt.

Like applying for a job past performance is the most reliable indicator of the future. Pay on time and set up an automatic payment in case you need to make sure that you don’t miss one.

Make use of a credit card that is secure.

When you declare bankruptcy, lenders will not be able to judge you as creditworthy, which could make it difficult for the majority of credit cards to be accepted. When you have a secured credit card you can deposit your own cash as collateral. This acts like a credit line. Since the issuer of the card cannot lose money through this arrangement it is likely to grant you a credit card even if your credit rating is not in good shape. Make sure you make sure you use the card in a responsible manner and make your payments in time, just like you do for any other card.

Keep credit utilization low

Achieving a low percentage of credit utilization is also an important factor in building credit. Credit utilization is your entire outstanding balance divided by the limit of your credit line. For instance, if you have a credit card that has limits of $5,000 with the balance is $500 the usage is 10 percent. There is no strict and fast rule of how much your credit utilization should remain, though the standard guideline is to limit it to 30 percent.

One of the primary factors that determine your credit limit when you apply for credit card are your earning. With your earnings credit card companies expect you to to utilize your credit card limit that they offer you in a responsible manner. If your credit limit is constantly increasing the amount you can consider as a red flag.

Incorporate utility bills into your credit report

When you’re trying to recover from bankruptcy, you’ll want everything to be on the credit report to show that you’re still able to make payments in time. Since utilities must be paid on a monthly basis by you, including them in the credit report can show that you are able to make your payments. It is necessary to contact the utility company directly and inquire whether they will provide the information on your credit reports to the credit agencies. It is also possible to set up automatic payments with your utility company to make it easier to keep your payments on track.

About the Author

Bob Haegele is a personal finance writer who specializes in subjects like banking, investing credit cards, real estate. His writing has appeared by The Ladders, The Good Men Project and Small Biz Daily. He is also the co-owner of Modest Money and is a dog walker and dog sitter.

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