We’ve heard rumors that recovering from bankruptcy is impossibly difficult, and that most people cannot recover. However, you can take steps to make sure that declaring bankruptcy is truly the beginning of your new financial journey. Though it won’t be easy, but it’s possible.
Steps for Recovering from Bankruptcy:
- Double-check to make sure your credit file is correct.
- Keep tabs on your credit report.
- Make your payments and make them on time.
- Avoid purchasing high-interest products.
- Don’t fall for the credit repair scams.
- Get a secured credit card.
- Get a regular credit card.
- Keep your balances low.
- Pay your balances close to their due date.
- Increase your credit mix in stages.
- Create and stick to your budget.
- Start an emergency fund (just in case).
- Be determined and be prepared for difficulties.
In a 2018 survey, LendingTree found that within one year of declaring bankruptcy, 43% of people with a record of bankruptcy on their credit report scored 640 or higher. Within two years, 65% had a credit score above 640. Considering 700 is a “good” credit score, 640 is not only acceptable, but a huge accomplishment!
Bankruptcy records will appear on your credit report for seven to ten years depending on the type of bankruptcy you filed. This is plenty of time to work on your financial recovery and improve your credit score. And just because you have a bankruptcy on your record does not mean you can’t still apply for a mortgage or a loan. Though it’s usually recommended to wait until you’ve rebuilt your credit score, it isn’t unheard of for people to be approved.
For more information on bankruptcy or to discover if bankruptcy is the right choice for you, contact Craft Law Offices for a free consultation at 252-752-0297.