Chapter 7 bankruptcy is the most common form of bankruptcy in the United States. Consumers and businesses alike use it to liquidate their assets to get on better financial footing. Although the overall bankruptcy rate has declined in recent years, it has remained steady in Tennessee. The state is actually the second highest in the nation for bankruptcy filings.
A lot of people become intimidated by the bankruptcy process. However, people considering it should view it as the beginning and not the end. You will still be able to purchase a house one day. It all depends on how you treat your finances during and after the bankruptcy. Here are some surefire steps for improving your credit score after you file for bankruptcy.
Get a retail or secured credit card
You may be wary of credit cards after filing for bankruptcy, but getting a specialized one can help your credit in the long run. Retail credit cards are useful. They typically come with looser requirements than other types. You just need to make sure you pay off the balance on time, because these cards generally come with excessively high interest rates. A secured credit card forces you to put up money upfront, so you cannot spend more money than you have.
Check credit reports regularly
Credit bureaus are not perfect. They occasionally make errors on people’s scores. This is not good if you plan on purchasing a car or house in the near future. It can be a lengthy process to restore your credit rating to where it should be. You need to check your reports often to catch these errors as soon as possible.
Report payments to consumer credit bureaus
You should ask your landlord to report your rent payments to the three main credit score bureaus. You can do this for all other payments you make each month. It can boost your score, and there is nothing extra you need to do.