Once a bankruptcy has been discharged, consumers often feel an overwhelming sense of relief. Collections efforts stop and one's income and assets are free from making debt service payments. For many in Michigan, a sense of freedom and hope for the future defines the period following a bankruptcy, and the future is wide open.
The best way to take full advantage of this forward momentum is to aggressively address credit repair. It is no secret that one's credit will take a substantial hit following a bankruptcy, and the process to rebuild one's credit rating takes time. However, by beginning this process immediately following a bankruptcy discharge, consumers can emerge with a solid credit rating in a shorter period of time.
One way to begin rebuilding credit is by use of a secured credit card. These cards are issued by major credit card companies, and function the same way as all credit cards at the register. However, when a secured card is opened, the consumer places a deposit with the card issuer that dictates the amount of available credit. When payments are made in a timely fashion, the card issuer reports to the credit bureau, thereby boosting the cardholder's credit scores. Consumers should ensure that the card they choose reports to the three credit bureaus, and should manage this line of credit wisely, as late payments will also be reported.
When considering one's financial future following bankruptcy, the road ahead is full of possibilities. Rebuilding one's credit as quickly as possible will allow a Michigan resident the chance to open future lines of credit on good terms. As with any long-term process, the sooner one starts, the sooner the rewards can be reaped.
Source: Fox Business, "How to Rebuild Your Credit After Filing for Bankruptcy," Roman Shteyn, March 5, 2013