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How can I rebuild my credit after a Chapter 7 bankruptcy?

 

Though you have recently filed for bankruptcy, keep in mind that it does not stay on your credit report forever. As Experian points out, a Chapter 7 bankruptcy will remain on your report for 10 years. During that time, you can take several steps to rebuild your credit and give yourself a chance at a better financial future.

NerdWallet points out that one of the best ways to improve your credit score is to obtain a secured credit card. However, many people find themselves in financial distress due to credit card debt. Therefore, you should only open such an account if you feel you can use it responsibly. There are government-approved credit counseling agencies that can help you learn how to manage a credit card account. In fact, part of filing for bankruptcy requires that you take such a course.

In addition to opening a credit card, you can also do the following: 

  •        Be sure to check your credit report for any possible errors.
  •        Make every bill payment on time and in full.
  •        When possible, set up automatic payments so you know you will not miss a payment and incur late fees.
  •        If you have credit, do not use more than 20 percent of your limit.

Experts also recommend putting together a budget and then sticking to it. This is basic money management that will ensure you have enough money to pay for the necessities. It also teaches you to eliminate frivolous spending.

While this information may be useful, it should not be taken as legal advice.

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