We use the term ‘quickly’ in relatively here because process to recover from bankruptcy. However, once discharged, the rebuilding process begins and that’s where the quickly part comes in.
Our Hamilton auto loan team has put together some simple, actionable tips you can use to recover from bankruptcy and return to normal as quickly as possible.
We hope they help.
Open a New Bank Account
You can continue using your old bank account if you like but we recommend a completely new slate. A new bank account with a new bank, chequing and savings, can help set the scene for recovery.
As long as it can handle automatic payments and has all the facilities you need, you can choose whatever bank you want.
Set up Automatic Payments
Once you have your new account, set up automatic payments for everything you can. Rent, mortgage, utilities, phone and anything else you may have.
Use these automatic payments to build a solid payment history which will begin helping rebuild your credit score within a couple of months.
Get a secured credit card
Apply for a secured credit card or credit builder card and use it for regular expenses. Buy gas with it, buy groceries with it and use it wherever you can. But only use it for things you’ll be buying anyway, don’t use it for the sake of using it.
Set up that automatic payment and treat the card like cash. Only spend what you have and make sure the card is fully paid off at the end of every month to avoid paying interest.
Set up a household and personal budget
Budgeting is incredibly important for managing money. It shows what’s coming in and what’s going out and as long as you’re accurate, numbers don’t lie. You can see clearly how much you have, how much you need for bills and outgoings and how much you can allocate for savings.
We cannot overstate enough how important budgeting is. It’s a vital aspect of personal finance for everyone, not just those rebuilding their credit score.
Allocate something for savings
If at all possible, allocate a monthly amount for savings. It doesn’t have to be much but having an emergency fund can stop you needing to use credit cards or other forms of borrowing during emergencies.
If you can stay on top of borrowing and keep credit cards clear each month, life rapidly becomes easier to manage. Having a savings pot, however modest can help with that.
Recovery takes time and you’re going to need to be patient. This isn’t anything you don’t know already but is worth restating. It can take between 1-2 years to recover fully from bankruptcy so setting that in your mind early should prevent frustration later.
It isn’t easy. It isn’t going to be a walk in the park but it is possible. By using one or all of these tips, you can rebuild your credit score and get back on track. Who doesn’t want that?
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!