If you are considering filing for bankruptcy, you may have concerns about how it will affect your future. It is important to understand that bankruptcy does affect your credit score and ability to borrow money.
However, these consequences do not last forever. There are things you can do to help and speed up the recovery process.
Make a budget
One of the first things to do is analyze why bankruptcy occurred. If it is due to irresponsible spending, it is imperative to make, and stick to, a budget. Consumer.gov outlines the importance of a budget and how to make a realistic one. The basics are to subtract your monthly expenditures from your monthly take-home pay. If you typically spend more than you make, you need to decide where you can cut costs.
When making a budget, it is smart to plan for saving some money every month. This helps prevent you from getting into financial trouble in the future when unexpected bills pop up.
Obtain a secured credit card
According to U.S. News and World Report, one way to begin building back credit, while preventing uncontrolled spending, is to obtain a secured credit card. With it, you can only spend what you put in as a deposit, but the transactions help improve your credit score.
Pay all bills in full and on time
Car and rent payments also affect your credit score. Make sure you pay these bills, as well as all other bills, by or before the due date and in full. Late payments go against your credit, so make sure paying them is a priority.