If you’re dealing with debt and feel overwhelmed, you may be starting to look into other options. One of your options could be to file for bankruptcy.
Bankruptcy can have a positive impact on your life and give you an opportunity to start over with a fresh financial outlook. That being said, it will take time for your credit history and credit score to recover if you choose to go this route.
How long will it take to improve your credit after bankruptcy?
This is a difficult question to answer, because every bankruptcy is different. If you already have missed many payments and have debt that went into collections, your credit score could be poor. You may have a 500 or 525 score, for example. While a bankruptcy tends to lower people’s scores, that isn’t always the case for people whose credit scores have already tanked. Depending on the kind of bankruptcy you choose, you could see an increase in your score when the bankruptcy is discharged.
How can you rebuild after bankruptcy?
Rebuilding after bankruptcy is fairly straightforward, so you can start right away. If you have utility bills or any remaining revolving debts, you need to make sure you pay them on time every time.
Then, consider taking out a credit-builder loan or secured credit card. Both of these report to the credit bureaus, so you can start improving your credit score by showing that you have a positive relationship with borrowing money and paying your debts on time.
You can also ask if anyone you know would add you as a cosigner on a loan or apartment rental, for example, so you can begin building up a history of payments to boost your credit.
Finally, remember to check your credit score regularly online. Doing this will help you identify any issues as soon as they arise, so you can quickly dispute a charge or pay off a debt that accidentally went into collections.
Bankruptcy could be a door to a better financial future
Bankruptcy isn’t always a bad thing. It could help you get back on your feet and improve your financial outlook. It is often worth considering.