Bankruptcy can be an extremely helpful tool for recovering from poor financial circumstances. However, it can also come with a pretty significant knock on your credit score. An important thing to keep in mind is that this low credit score isn’t permanent. In fact, there are easy steps North Carolinians can take to start the process of rebuilding credit.
Here are a few things you can do to start strengthening your credit:
Create a budget
Spending habits can quickly get out of control without a disciplined budget. That’s why it’s important to create a budget you can manage and stick to it. Apps like You Need a Budget and Mint can help you track your spending habits and where it may be a good idea to tighten up. A budget can help ensure that you don’t overlook hidden costs or miss a bill, which can hurt your score even more.
Apply for a secured credit card
While these cards have higher annual fees and a larger interest rate than normal credit cards, they can be easier to get for someone with bad credit. The cards will usually require a deposit that is used as your credit limit.
These cards may feel limiting, but they can be an easy method to show lenders that you are able to maintain stable spending habits and make payments on time. It’s important that you are not late on a payment or miss one entirely, as this can undo all the positive impacts of having a secured card.
Stay updated on credit reports
It’s a great idea to focus on the health of your credit score, and stay updated on any changes. Even better, it can be a good motivation to stick with your budget when you see your credit scores improving. By closely monitoring your report, you can catch any errors early on. It also helps inform you when it’s possible to switch from secured credit to standard credit.
Pay bills on time
This may seem like an obvious one, but it can’t be stressed enough. Paying bills on time will be one of the most important aspects of rebuilding your credit after a bankruptcy. By maintaining a timely payment schedule, you show creditors that you are a safe bet to lend to and that you take your debt obligations seriously.
These are just a few of the steps you can take to begin repairing your credit score. It’s important to be patient and diligent when working on your credit profile. Bankruptcy doesn’t have to permanently affect you.
Bankruptcy can be intimidating, but an attorney skilled in bankruptcy law can help explain the ramifications, as well as the best options for your situation.