4 tips for rebuilding credit after filing for bankruptcy in New Jersey

It is possible to rebuild credit after filing for bankruptcy in New Jersey though following a few simple steps.

It is no secret that filing for bankruptcy in New Jersey can affect a consumer's credit score. The Consumer Financial Protection Bureau points out that a bankruptcy can remain on someone's credit report for as long as 10 years.

However, there are ways that people can rebuild credit and go on to secure loans and have a good score. The following tips can help consumers bounce back after a bankruptcy:

1. Make a budget

One of the most important items anyone in any financial situation can do is to create a budget and stick to it. Create a line for income and a line for expenses. Experts advise minimizing expenses in order to be able to save a little money every month. As the Federal Trade Commission points out, anyone who files for bankruptcy must complete a credit counseling course. This course should be helpful in assisting consumers with creating a budget.

2. Get credit

Many people wrongly believe that if they have a low credit score, they will not qualify for a line of credit. However, there are a number of options for people in these situations. For example, there are secured credit cards, which are backed by a deposit the consumer makes. The limit of that card is typically equal to the amount of money in the deposit. This is not a long-term solution, as these cards typically have high interest rates and annual fees. However, it can help demonstrate to lenders that someone is able to use credit responsibly.

3. Use credit responsibly

Every bill should be paid in full and on time. In other words, no one should ever take on credit card debt that he or she cannot pay off at the end of the month. If carrying a balance is inevitable, it should be kept low. Experts recommend that balances remain at 10 percent of the credit limit or lower to minimize the impact it will have not only on a credit score, but also on the consumer's ability to pay off the debt.

4. Regularly check the score

Every year, consumers should review their credit report to make sure there are no errors or omissions. It is possible and even common for phantom account to appear or that old debts remain on reports. Ensuring accuracy on the report is key to maintaining a healthy credit score.

It can seem overwhelming when trying to create a fresh financial start, but working with the right professionals can make the process go smoother. People who have questions about this topic should connect with a bankruptcy attorney in New Jersey.