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Filing for bankruptcy won't necessarily ruin your credit for 10 years. Following solid credit practices will improve your situation and may allow you to obtain credit within months of filing for bankruptcy.
Credit Report
Credit history is maintained in your credit report. Knowing what is in your credit report is the first step to obtaining credit after filing bankruptcy. Correct any errors you find on your credit report.
Credit During Bankruptcy
Bankruptcy does have an impact upon your credit. High debt, late payments and defaults are what usually lead you into bankruptcy and have negative effects on your credit health. Breaking bad credit habits will send you on your way to getting credit after you have filed bankruptcy.
When to Improve Credit After Bankruptcy
As soon as you file for bankruptcy, you may begin taking the steps necessary to build better credit. If you are careful, you will, over time, be able to get credit after filing for bankruptcy.
Steps to Bounce Back
After filing for bankruptcy, apply for a secured credit card, which is when you maintain a set balance in a savings account that serves as collateral for the credit card. If you use this credit wisely by paying your bills on time and using only a portion of your credit limit, you will begin to re-establish good credit. Pay your balance in full whenever possible. Obtaining and using credit is the only way to establish good credit.
Mistakes as Learning Tools
Repeated filings of bankruptcy will appear as an attempt to beat the system and getting out of your financial obligations. Repeated credit mistakes will only keep you from obtaining credit.
Applying for Credit
Getting credit after filing for bankruptcy may begin as soon as you file. Bankruptcy will allow your debt to be discharged or allow you to pay what you are able to pay to eliminate the debt, oftentimes reducing or eliminating finance charges and fees.
Source:
Smart Money: Bankruptcy Can Improve Your Credit Score
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