Is It Easy To Rebuild Credit After Bankruptcy Or Difficult?

The term that's applied to a business or individual that can't secure money from their bank is called Bankruptcy

. Once you are declared bankrupt, you will not be able to borrow money from your bank or use your accounts until it has been lifted. So whether you were declared bankrupt involuntarily or declared yourself, you are probably wondering if it is easy to rebuild credit after bankruptcy or hard.

It is quite possible for your credit score to be repaired but it will be difficult. It's important to remember that bankruptcy shouldn't be the absolute end of your world.

The first step is to apply for a new credit card. While this may seem extremely irresponsible, it will be necessary to rebuild your credit. After declaring bankruptcy, you will most likely only be approved for a prepaid card. These types of cards have to be filled with money before they can be used. They are extremely low risk since it's impossible to go into a negative balance.

After your prepaid credit card is received you can proceed with making payments with them. Even though your card has been preloaded, it will act just like a real credit card when you're making purchases. That means that every single purchase it is used for will show up as being paid in full with a credit card.

Once you over time fix your credit with the preloaded card, you will eventually be able to sign up for a real one. It will probably have a very high interest rate so the card will only be used for cheap purchases. Purchase things like food and gas with the credit card and then quickly pay them off. At the end of every month, your owes on the card needs to be at zero. When the card's lender reports to your credit bureau, your negative credit will carefully improve.

If you have a car payment and other monthly bills, use your credit card to pay them. These types of bills aren't reported to credit bureaus unless they are paid using credit. After you use your card, it's very important to pay them off immediately. In time, your credit limit will slowly rise.

Do not let your recent credit luck go to your head. Purchasing pricey and unneeded things like TVs or laptops will only harm your money situation. Your new high interest credit card's only job is to increase your credit score. After it's limit has been raised to a normal amount, keep the item with you twenty four hours a day and only utilize it in the event of an emergency.

All people are allowed one completely free score check every year so look at yours to monitor how much your financial score has increased. But make sure to only utilize the totally free site that is promoted by the US government, never pay money to get that data. It will take a fair amount of time for your credit score to completely improve. It is very crucial to not let one's self go right into doing the same horrible money mistakes.

by: Dona Roma

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