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Debra Booher & Associates Co., LPA
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It was a difficult decision, but you and your family decided bankruptcy would be the best solution toward overcoming months of financial difficulties. It was not a decision you made lightly with all the questions that floated in your head. Among them: Will I lose my house? Am I a financial failure? What does my financial future hold for me? How can I rebuild my credit?

Rebuilding your credit should be among the priorities you undertake after a bankruptcy. Yes, you filed for bankruptcy. Don’t dwell on it, because now it’s time to focus on the future. Get your credit back into an improved state.

Tips on how to rebuild your credit

We’ve assembled some basic guidelines that will help you get back on track financially. Here they are:

  • Boost your savings rate. Create a budget and accurately track your expenses.
  • Live within your means and reduce spending in all areas that are non-essential expenses such as restaurant meals, cable television, and entertainment and leisure. More significant changes would include downsizing to a smaller home or apartment and getting a second job.
  • Build an emergency savings fund of at least six months worth of living expenses. Ideally, you should try to have a year’s worth, but even something as small as $500 will help.
  • Stay away from payday lenders. You may be desperate for money, but you will find yourself deeper in debt getting a loan from such a business and paying exorbitant interest rates for the smallest amounts of money.
  • If you want a credit card, obtain a secured credit card. This card is backed by a cash deposit you make when you open the account, and this money is equal to the card’s credit limit. The card is ideal for people with no credit or poor credit. After using it for several months and you’ve shown the credit card company that you pay your bills in a timely fashion, your credit score will likely increase. The result: You may be able to upgrade to an unsecured credit card. But if you do get one, please pay your bills on time and try to pay the monthly balance.
  • Live a healthy lifestyle. The No. 1 reason people file for bankruptcy is due to medical debt. For those who’ve suffered a sudden accident or life-threatening medical emergency, this might not be helped. However, living a healthier lifestyle can help you avoid a great amount of other medical costs. Exercise more; eat nutritional foods; surround yourself with positive people; pursue your hobbies; and enjoy your life.

Bankruptcies happen because life happens. Although they may stay on your record for seven to 10 years, a bankruptcy is not the end of the world. You can rebuild your credit. Just have patience and confidence that you will be able to do so