- 1). Start an emergency fund. One of the prime reasons why people use credit cards unwisely is when emergencies arise and they need quick funds for less than $1,000 for expenses such as car repairs, an unexpected illness or an insurance deductible. Calculate your monthly expenses multiplied by three to six months for an emergency fund. Divide that total by 12 to 18 to have a fully-funded emergency fund in a year to 18 months.
- 2). Create a budget by writing in one column on a piece of paper your monthly income average that you derived from income statements such as pay stubs or invoices. In another column, list such necessary monthly expenses. These include emergency fund savings, groceries, rent, utilities and transportation costs. It also includes such annual costs as insurance (divided by 12). List non-essential costs such as dining out, entertainment and clothing allowance. Calculate the difference between your income and necessities, then assign each non-essential cost a budget adding up to that difference. Carry a simplified list of your budget with you in your wallet or bag to ensure you stay on budget.
- 3). Maintain a balanced budget and pay your bills on time and in full every month. If one bill goes unexpectedly up, that money must come out of another category (typically from a non-essential) so you are not spending more than you are making every month.
- 4). Review your credit report for any misinformation and errors, especially in regards to accounts paid and charged off in your bankruptcy. Petition the credit bureau to correct the mistakes and errors. These corrections can significantly improve your credit score.
- 5). Apply for a secured credit card that regularly reports to major credit bureaus and carries with it reasonable fees. A secured credit card is linked to an account that holds a deposit of the total credit limit on the card, which is generally between $200 and $500.
- 6). Acquire an installment loan, such as a student, car or personal loan. If you already had student loans, you can continue to improve your credit score by making your payments on time and paying more than the minimum if at all possible. This should be worked into your budget to ensure you are living within your means. Federal student loans cannot be discharged in bankruptcy.
- Advertisement -
- Advertisement -