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Does Bankruptcy Ruin Your Credit Forever? - By: Paul McDermott, Posted on: 2007-07-31

You have made the tough but necessary decisions to get your finances in order, and have gone through the bankruptcy process and now plan on getting your credit back in order. Can you really do it and if so, how do you do it and how long will it take?

All is not lost if you have made some bad decisions with your credit. If you have declared bankruptcy, your slate is clean, but your credit score will suffer. By taking steps to improve your score, you will end up saving a lot of money if you get a mortgage or car loan.

It is not a good idea to immediately apply for unsecured lines of credit. You are likely to get rejected at best, which will show up on your credit history, and keep your credit score low. You might get accepted, but you will probably pay much higher fees and interest rates. One thing to consider is getting a secured credit card, where your credit line is determined by depositing cash into your account as collateral.

Even with good use of your finances, it can up to ten years to get your credit back to a normal level. It may seem like a long time, but the benefits can be tremendous in terms of money saved. And when you consider that you have just had your big debt balances erased by bankruptcy, this is still a better situation than before your bankruptcy.

How To Repair Your Credit After Bankruptcy

You have a fresh start, so it is a great time to evaluate where you are financially. I know it sounds boring, but you need to understand how much you make and where you spend it. You should make a budget if you want to really take control and see some real financial progress.

Next, put some money aside via automatic deposit for emergencies and future planned expenditures like a house, college for your kids and retirement. Then plan your purchases and avoid impulse buys. If you really have a weak moment and buy something unplanned, use cash. Remember, you don't want the suffocating feeling of drowning in debt again.

To keep you out of trouble caused by impulse buying, try waiting a day before you make that purchase. Keep your larger goals in mind, feel the freedom from that feeling of suffocating debt problem and resolve not to get into that situation again.

Find ways to have fun that don't require buying something. I am sure deep down you know that a new pair of shoes or a new tool for the garage or a new book don't bring you real satisfaction. It is more like the joy of a child at Christmas, who goes from gift to gift but doesn't really appreciate them. As you keep your spending under control, you are moving closer and closer to reaching the financial goals that really matter, and with that your credit repairs itself.

Article Source: http://articleowner.com

Author Paul McDermott reveals more about his experience with credit repair after bankruptcy and other credit and debt issues at Credit Repair Guide.
This article is available as a unique content article with free reprint rights.

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