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Bankruptcy is undeniably one of the worst positions to be in – typically resulting in low cash flow and lots of debt. It stays on your credit card report for 7 to 10 years.

There is a strong possibility that your credit card score will remain low until you take some steps to make it better in no time.

It takes a lot time, patience and persistence of a steady stream of on-time payments on a monthly basis to rebuild the credit respectively.

Buckeye State Credit Union is here to help. Stop in to a Branch Location to see how we can help.

Think of small impacts with the potential for long term rewards. Start by applying for a basic credit card. The credit limit will be small but make the payments at all cost.

Two Ways to Rebuild your Credit

1. Get a Secured Credit Card: The secured card provides the best means when you are coming out of bankruptcy. Through this card, you can deposit money in a savings account that enables you to secure a line of credit for you.

For example, if you make a 300 dollars deposit that has an annual fee of 29 dollars, then your credit card limit will be 271 dollars. If you pay the account on time and make small purchases monthly, then this secured card will be quite helpful towards your credit. The usage of 10 to 15 percent of credit line is good, but you need to keep your balances low.

Get a Retail Card: In the past department store cards and the retail cards have extended credit requirements that may make you eligible after the bankruptcy. This can only happen once you have made a series of steady payment on time through a secured card respectively.

You have to pay the account entirely in every month, because of the higher interest rates that are linked with these cards.

How the Credit CAN be Used Wisely

It is better for you to use your credit wisely after you get relieved from the post-bankruptcy period.

2. Set up automatic payments: It happens that several people opt not to receive the paper bills and tend to forget making the payment on time. After bankruptcy some Credit Unions may require automatic payments for rights to line of credit.

So, you need to set up automatic payments so that the payments get directly deducted from your account each month on the respective due date.

3. Only borrow what you can afford to borrow: As soon as you know your budget and limit, you will know what you can afford. If on the regular budget you cannot meet the expenses for a trip to an action packed day at a Cleveland Cavaliers game, do not risk using a credit card to fund such a trip. Kindly refrain from using credit card excessively and use it only for those things that you can afford to buy.

Remember this Credit Card is a short term loan.

4. Make a budget and stick to it: You need to evaluate on what you can manage to pay on your debts monthly after you have paid off your expenses. If your budget for food is 200 dollars, do not spend more on it. Overspending on one expense will not allow you to pay your debts on time.

After bankruptcy, you have to move cautiously and rebuild your credit in the correct manner. You have to ensure that you pay your bills on the stated time and avoid the bad credit score again from the late payments respectively.

Working to use your bank account and lines of credit consistently and responsibly will reduce your risk financial challenges in the future. The decisions you make everyday not only affect your future but you’re also teaching your children financial habits for their future.

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