Today, families are faced with many decisions to make when it comes to finances. Losing a job is a reality, especially for single income and/or single-parent homes. Many times, families are faced with the harsh realities of pass due bills and are looking for answers. Bankruptcy might have significant long-term consequences, but it doesn’t permanently ruin your credit forever. As a bankruptcy lawyer like one from The Law Offices of Ronald I. Chorches can tell you, it is possible to make meaningful gains to your credit score in just a short amount of matter. With the right habits, you can establish a plan that will allow you to get back on track and make those important purchases to better your familial situation, like owning a house. Here are some ways that you can rebuild your credit score so that it’s stronger than ever.
Stick to Your Budget
Carefully planning a budget is one of the simplest ways that you can restore your credit score. Evaluating your monthly budget and separating important buys from non-essential items can help you achieve greater financial freedom. Start with small goals so that you don’t feel overwhelmed, such as saving $100 every month in a certain spending category. There are many user-friendly budgeting apps and tools available that you can rely on to help you keep tabs on your spending.
Use Your Credit Card Wisely
Improper use of a credit card is one of the most common reasons that people file for bankruptcy, but it is completely preventable. After finishing the bankruptcy process, be more conscious of how you use your card and what you use it for. Don’t just use your credit card for unnecessary purchases, especially if you are close to going over your planned budget. You may be tempted to begin using your credit card once your credit score finally reaches a healthy range, but limiting your credit card to mindful purchases can help you avoid financial trouble again.
Apply For a Small Loan
It may be harder for people who have filed for bankruptcy to get approved for a loan or obtain the interest rate they want, but new credit is actually one of the most effective ways to build your credit score again. Getting a small, manageable loan can help you gradually increase your score. You need to be able to prove to lenders that you can be trusted to pay back your debts again. When you have a small loan, you can make smaller payments that you can afford to pay so that you have a record of on-time payments.
Restoring your credit score will take time, but with patience and mindfulness about your goals, you can obtain it sooner than later for your family. For more information about financial recovery after bankruptcy, talk to a seasoned bankruptcy lawyer that you can trust.