Filing for bankruptcy is never an easy decision. Bankruptcy negatively affects your credit score and will stay in your credit report for at least seven years. An unfavorable credit score means taking out loans will not only be difficult, but more expensive as well. Most credit card companies slap a higher interest rate on credit applicants who have filed for bankruptcy.

It is possible, though, to rebuild your credit after declaring bankruptcy. It will take time and patience from the very first step. Remember how long it took you to run up the bills that led to your bankruptcy filing, and be prepared to give yourself at least that much time to work your way back to financial health. However, it is possible to be on the road to financial recovery in as little as two to three years after you receive the debt discharge from bankruptcy court.

Before anything else, know what your credit reports are saying about you. Everyone is entitled to one free credit report from the major credit bureaus each year. Order your free credit report and scrutinize it carefully. Correct any errors and contest any discrepancies in your report. Think of this as your starting point in rebuilding your financial life after bankruptcy. It can only get better from this point forward.

The next step would be to apply for a secured line of credit. This limits your credit to the amount you have in deposit with the lender. Charge only the items that you will normally pay for in cash for the month. Then pay off the balance in full before the due date each month. Do this each month and you will slowly prove your ability to pay for your debts and your credit worthiness will improve.

Remember the spending habits that caused your bankruptcy filing, and make a resolution (even if it happens to be July) to not commit them again as you rebuild your credit. Set aside some part of your income as savings, no matter how small an amount this may be. Saving is a good habit to pick up for life regardless of whether or not you are trying to increase your credit score.

In this great country, second chances abound even for those who have had to declare bankruptcy. It will take hard work and discipline but definitely less than seven years to get your life back in order. Start today.

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