Filing for bankruptcy marks you as a potential credit risk, and your credit score reflects as much. This can make it difficult for you to get a credit card or personal loan for the foreseeable future, even after discharge from your bankruptcy.
It is not uncommon for an individual with an average credit score to lose up to 150 points as a result of bankruptcy. After filing for bankruptcy in Alabama, you can take certain steps towards raising and rebuilding your credit score to a workable number.
How to rebuild your credit in the short term
It might feel impossible to get approved for a credit card after filing for bankruptcy, yet utilizing and paying off credit is one of the most common ways to improve your credit score. You can overcome this conundrum by applying for a secured credit card. A secured credit card is relatively easy to qualify for and protects you from revolving credit card debt because your own deposit backs it. Despite the obvious differences from a traditional credit card, transactions made with a secured credit card will contribute to your credit score immediately.
How to rebuild your credit in the long term
Maintaining a strong credit score for years to come is a matter of establishing good habits that you can follow in the long term. Making payments on time and keeping up with your bills are habits that may improve your situation more than you might realize. Tucking money away into savings whenever possible is also a constant endeavor that can protect your credit score in the event of a financially ruinous emergency.
While bankruptcy may present new hardships, you can build a strong future by implementing a few financial best practices into your everyday life.