When you decide to file for bankruptcy, it means that you cannot service your current debts. As a result, it may be challenging to secure credit due to your low credit rating. You will need to rebuild your credit score on the road to financial recovery.
The earlier you start, the better. Regaining a great credit score is a gradual process that may even take years. Here is what you can do about your credit score.
Getting back your financial freedom
The first thing you need to do is to ascertain your current situation. It includes verifying that your credit score is updated and accurate. This will give you a position to begin as you look to improve your ratings. Secondly, and most importantly, you need to assess and weed out what got you here in the first place.
Eliminate bad spending habits and consider having an emergency fund for a soft landing in case of unexpected events. If you have pending debts, ensure that you are current with them to avoid reversing the gains you have made.
Additionally, establish a budget and stick to it. It is advisable to avoid unnecessary expenses at this point. Anything that makes you spend more than you had initially planned. You might also want to consider utilizing credit facilities tailored for such circumstances, such as having a secured credit card. It can be a short-term solution that could improve your credit score.
Consistency is key
Remember, Chapter 7 bankruptcy will stay on your credit report for ten years. However, if you are consistent and determined to get back on track within that time, your credit rating could significantly improve in the end. Bouncing back from bankruptcy is possible, but it all boils down to the decisions you make along the way.