Many list the damage done to a person's credit score as one of the best reasons not to file for bankruptcy. The truth is that when a person reaches the point where bankruptcy is necessary or even considered, chances are good the choices are declaring bankruptcy (damaging to a credit score) or missing payments and defaulting on loans (also very bad for one's credit score). It is not an irrelevant consideration but saying that it is the best reason not to file for bankruptcy is somewhat ridiculous.
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The first thing to do after a bankruptcy filing is complete is to get a bank account and start working on paying bills on time. This means that utilities and other monthly payments must be placed in a person's name and paid off on time each month. This is a huge step as it helps to show the banks via a person's history that the person who just filed for bankruptcy is really truly trustworthy, despite having filed for bankruptcy.
Another thing to remember is that one cannot rebuild credit without actually using credit. A cash only basis of living may be a great idea for someone who feels he or she cannot handle the temptations of a credit card but it doesn't help a person rebuild his or her credit score very quickly. A credit card, particularly a secured card like those that are designed for individuals with poor credit scores or recent bankruptcies, doesn't have to be used if it is held. Merely having evidence of the amount of credit that a person is offered can help rebuild a credit score, especially if that card generally has no balance on it.
The most important thing to remember about rebuilding credit is that it doesn't get rebuilt in a day. While it may seem that it was destroyed overnight through the act of filing for bankruptcy, the truth is that the credit score was not destroyed overnight. When a person files for bankruptcy, they are generally swamped by the large amount of credit they have used which means that the credit score had already started declining. It was destroyed by the large amount of debt compared to the total amount of credit available and then compounded by other bills that probably accumulated because so much income was going to paying off credit situations.
While it may seem that a poor credit lasts for forever after declaring bankruptcy, patience and smart spending will speed the process along.
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