Many people who enter the bankruptcy process worry about the fate of their credit.
This is actually unnecessary as the bulk of credit damage happens before the bankruptcy process is even initiated.
While no one wants the added hassle of rebuilding their credit after resolving debt troubles, doing so can put you leaps ahead of others in the credit game.
Making The Effort The one aspect that most people who have suffered some debt trouble overlook is monitoring their credit report after debts are resolved.
Relief from debts is welcomed, but it cannot be assumed that your efforts are finished.
In fact, you may be surprised to learn that your credit report is not automatically updated when debts are relieved by creditors.
In fact, it can take several months before creditors update your information.
Always check your credit report anytime there have been changes, good or bad, to your account to keep up with how the changes affect your rating.
If you find that your creditors have not updated your accounts, file a formal request to have them updated with the credit reporting bureau.
After your accounts have been updated and your information accurately portrayed, you should consider looking for new credit.
Although a bankruptcy does add some challenges into getting new credit, it is far from impossible.
The biggest challenge you face now is finding a decent line of credit will good terms.
Most often, credit offers will with high interest rates or extremely low limits.
Shop around for the best credit offer and look for the best interest rate.
Forgo worrying about the spending limit as that comes into play later.
Avoid prepaid credit cards, as they do nothing towards rebuilding your credit.
Also avoid secured lines of credit at first, as they are more risky and often involve more stringent lending terms.
Once you have found one or two unsecured lines of credit, begin establishing a positive borrowing history.
Remember that now is not the time for maxing out limits and making big purchases, but your goal is to maintain a manageable balance that you can repay in a timely manner.
Keep your purchase balance to less than 40 percent of the total spending limit; anything more than this can counteract your efforts towards boosting your credit score.
Always pay on time and never use credit cards to cover payments on other debts or frivolous purchases.
Your goal now is to plan your purchases, repay them within six to twelve months and repeat the cycle.
Boosting credit can take time, but it is well worth the additional planning and effort you put in.