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Even though filing for bankruptcy can help you discharge a large portion of your debt, it typically hurts your credit score. Even after you are able to obtain a new credit card, you will likely be paying higher interest rates. Luckily, there are some simple steps you can take immediately following bankruptcy to start rebuilding your credit:

Create a Budget

The best way to avoid falling back into your pre-bankruptcy spending habits is to document your monthly expenses. Once you have a list of how you spend your money, you can compare these expenses to your monthly income. The actual process of writing down where your money is going can help you prioritize expenses like rent, utilities, and food. From there, you will know how much money you have left to spend on luxuries and entertainment.

Obtain a Secured Credit Card

It will likely be difficult to take out a new credit card following your bankruptcy petition, but you may be able to obtain a secured card. Secured credit cards are linked to your bank account and have lower spending limits. Keeping up with payments on your secured credit card for six months to a year following bankruptcy will help you qualify for traditional credit cards once again.

Check Your Credit Report

Once you start taking control of your spending habits and finances, you need to keep checking your credit report for any errors. Checking your report also helps you understand what future lenders are seeing when they examine your case.

Since 1990, Cutler & Associates has helped Chicago residents navigate the bankruptcy process. By calling now, we can help stop collection calls, UCC 1 filings, and wage garnishments.