A bankruptcy is not good at all. It stays on your credit card report for 7 to 10 years. There is a chance that your credit card score will remain low until you take some steps to improve it in a short time.

But it takes a lot of persistence and patience and a steady stream of on-time monthly payments to rebuild credit respectively. You should think about a smaller time frame when you start applying for credit cards. After bankruptcy, there is a chance that you will not be eligible for the consumer credit card.

How to rebuild credit in two ways

1. Get a secured card: The secured card provides the best means when you are coming out of bankruptcy. Through this card, you can deposit some money into the savings account, and that deposit secures the line of credit for you.

For example, if you make a $300 deposit that has an annual fee of $29, then your credit card limit will be $271. If you pay your bill on time and make small purchases on a monthly basis, then this secured card will go a long way on your credit. Using 10 to 15 percent of your credit line is good, but you should keep your balances low.

2. Get a Retail Card – Department store cards and retail cards have relaxed credit requirements that will make you eligible to buy either after bankruptcy. This can only happen once you have made a series of consistent payments on time via a secured card respectively.

You have to pay the bill in full each month, due to the higher interest rates associated with these cards.

How can you use credit wisely?

It is better for you to use your credit wisely after you are released from post-bankruptcy. You can follow the steps below.

1. Set up automatic payments: It happens that many people choose not to receive paper bills and tend to forget to make the payment on time. Therefore, you must set up automatic payments so that payments are deducted directly from your account each month on the respective due date.

2. Only borrow what you can afford to borrow: As soon as you know your budget and limit, you’ll know what you can afford. If you can’t afford a trip to Bali on a regular budget, don’t risk using a credit card to finance the trip. Please refrain from overusing your credit card and only use it for things you can afford to buy.

3. Make a budget and stick to it: you must evaluate what you can pay monthly on your debts after you have paid your expenses. If your food budget is $200, don’t spend more on it. Overspending on an expense will not allow you to pay your debts on time.

Conclution

After bankruptcy, you need to exercise caution and rebuild your credit the right way. You need to make sure that you pay your bills on time and avoid bad credit score again for late payments respectively. If you use your bank account consistently and responsibly, you will never fall victim to financial hardship.