Filing for bankruptcy will certainly damage your credit, and it can remain on your credit report for up to 10 years. However, after just a couple years you can rebuild your financial status and credit score. Here are three ways to reestablish good credit after a bankruptcy:
- Bank Accounts. It may have been necessary to close your checking and/or savings accounts as a result of your bankruptcy or in the events leading up to it. Your first step, after your bankruptcy is completed, is to once again establish a good relationship with a financial institution. Once you have reestablished a positive history with a financial institution it may lead to an opportunity to obtain credit through that institution.
- Credit Cards. After you file for bankruptcy, you will probably receive many applications for credit cards in the mail. Be very careful of these, as many of them will charge you outrageous interest or annual fees. If you elect to get a credit card as a way of building credit, you will want to make certain that you pay it off each month to avoid accruing interest. It is very important that you do not go down the slippery slope of credit card debt accumulation. Another great option here is to establish a prepaid credit card.
- Car Loans. This type of loan is another way to build credit. Once again, find the lowest interest rate possible and always make your payment on time. Make certain you do not overextend yourself.