Debt and missed payments have mangled your credit score. You know that bankruptcy is your only option. It is going to erase your debt and give you a fresh start.
What you worry about, though, is how you can rebuild your credit after declaring bankruptcy. How can you make the most of this fresh start? Below are a few key things to do:
- Create a budget. Follow it. Do not let yourself spend more than you make in any month. A lot of debt happens accidentally because people simply do not budget.
- Write down the dates when your bills are due. Do it for everything from the mortgage to the phone bill. Make sure you get all of those payments in on time, every time.
- Use credit cards. This may sound counter-intuitive if your credit cards got you into debt, but responsible use is how you build your credit back up. You may even want to just pick a small amount of your budget, like $200 per month, and use the card for that amount of necessities. This keeps you out of trouble while building up your score.
- Look into other credit options. For instance, you may be able to use a line of credit instead of a credit card. If you do not qualify for a traditional card, you may also want to consider a secured card.
- Hold off on major purchases, like new cars. Build up your credit through smaller purchases and essentials first.
Do not make the mistake of assuming your credit is destroyed forever. You just need to know what legal options you have.