Aricle Vista

If you're reading this, then there's a good chance you've recently filed for bankruptcy. Naysayer's may have tried to convince you that filing for bankruptcy means you're going to have bad credit for the next seven years. Your attorney, friends, or family may all be telling you how bad your life is going to be because of your bankruptcy.These warnings are FALSE.While filing for bankruptcy definitely hurts your credit, you can overcome most of the harmful effects in as little as one year. If you know how to work the credit system, you can have good credit again soon.

1. Put you house in order.

Come up with a budget and a savings plan. You need to figure out how you're going to save. Also, make sure all of your old creditors know that you no longer owe them money. If they send you a collection notice, take care of it right away. Finally, reflect on what caused you to file bankruptcy in the first place and make sure you don't repeat the same mistakes.

2. Start hoarding.

This is the hardest part -- you need to save up a few thousand dollars. Mostly, this money will be your emergency fund that you can use to make payments if you have a problem. But some of this money will be used to get a secured credit card and for a vehicle down payment. You also need to keep all of your important financial documents like pay stubs, bank statements, bills, etc., because a creditor may ask for copies in the future.

3. Get a secured credit card.

Secured credit cards are a great way to get your credit back on track. Just make sure you don’t use them more than once. That's right, get a secured credit card but use it only once. Pay it off the first month you get a bill. Once that first payment is made on time, the credit bureaus will report that you're making payments. Then destroy the card. Even if the card is no longer being used, the credit bureau will still show that you're making payments on time and you will be building credit.

4. Buy an inexpensive pre-owned car.

Choosing an inexpensive pre-owned car is the easiest way to get approved for a loan. It's also the best car to buy if you plan on trading it in within the next year. Ideally, you would buy a cheap car and then trade it after 6 to 12 payments have been made. This way, you'll get credit but you don't have to keep the car forever. By going used and cheap, you'll lose less money when you trade it in.

5. Get more credit.

Now that you’ve bought a car and you have a secured credit card, it’s time to get some unsecured credit cards and to start working with a local credit union. Apply for the Discover card, any Visa or MasterCard (as long as there isn't an annual fee), or any credit card offered by your credit union. Most importantly, if your application for a credit card is denied, call and ask WHY. Because most applications are denied by computer, you can often call and get a denial overturned.

6. Buy the car you want.

The end is here. You've done everything right, a year has passed since your bankruptcy discharged, and your credit is now re-established. You can get the car you want.With all of these steps, it’s important to remember a couple of things. First, save money every month. Saving money is a life skill that everyone should have. Second, remember what caused your bankruptcy and don’t let it happen again. Use a budget, avoid impulse purchases, and make sure that you can pay all of your bills even if a major catastrophe occurs.