If you are considering going through bankruptcy proceedings to clear your debt, you may be scared about what this is going to mean for your credit. You have heard the rumors about not being able to get any new credit for seven years. You may have even heard about the impossibility for you to have good credit ever again. In fact, neither of these statements is true. Creditors are eager to start working with you to rebuild your credit the moment you walk out of the bankruptcy court. Being smart about how you work on rebuilding your credit can help you to get on the road to a better financial future sooner than you thought possible.

Why You Should Apply for Credit

The creditors you are working with through your bankruptcy are not going to help you to earn a better credit score. The only thing you can do with them is to remove your outstanding debt. To start building credit again, you need to obtain a credit card or some kind of credit. There are credit card companies willing to give you credit, as well as lenders willing to work with you on a loan. The idea is to obtain a credit card without a huge interest rate or a loan without a really high interest rate.

The reason why you want to take on new debt is because it is the only way to work on proving to creditors you are a good risk. As you start to make payments and maintain your debt, you are able to start building a better credit score. Once the bankruptcy falls off of your credit, you will have a lot of positive credit working in your favor.

Make Creditors Ignore the Bankruptcy

The main thing you want to do after you file for bankruptcy is to work on obtaining positive notes on your credit history so other creditors will ignore your past negative history and your bankruptcy. If you can pay your new debts on time and even pay them off over time, you will prove you have made a change in your financial responsibility.

The best way to prove you are responsible with your financial obligations is to obtain a debt you need to pay over time. A credit card is perfect for this. As soon as you get the credit card, you should spend all the way to the maximum credit limit on the card. Gradually pay the limit down until you get to the half-way mark. Maintain your balance at 50% of the credit limit for about six months. Make all of your regular monthly payments on time or early. Once you have reached six months, gradually work on repaying the credit card. Your credit score will shoot through the roof and creditors will be lining up to work with you.

Never make the mistake of turning your back to credit. An absence of credit history is just as bad, or worse, than a negative credit history. Working on a better credit rating right after a bankruptcy is the best way to assure a bright financial future.