By Bankruptcy is a state of being incapable to pay off debts. Several reasons may cause bankruptcy. Bankruptcy not only affects your credit scores and your financial history. However, this is not the end. You have several ways to remove the stain on your financial history and rebuild your credit score. You will have to be very patient during the process as it might take more time.
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How Does Bankruptcy Influences Your Credit Scores?
A credit score is an index that shows the capacity of repaying the debts of a person. A bankrupt person is one who is unable to pay off all his debts. Therefore, when a person goes bankrupt it highly influences their credit scores. However, different bankruptcies have different impact.
Further, in cases where a person or organization already has low credit scores, filing bankruptcy can help them increase their credit scores. However, for those who have well credit scores, bankruptcy will affect them more.
Tips to Rebuild Your Credit Scores:
- Keep evaluating your CIBIL reports: When you get your CIBIL reports, make sure to check them frequently and keep track of the information recorded in it. Also, check out if the information mentioned is error-free.
- Pay bills on time: Your payment history has a good impact on your credit scores. Therefore, make sure to pay off all the bills on time or earlier. To avoid making late payments, you can ask your bank to pay the bills on your behalf.
- Avoid going for credit repair services: Credit repair services help to fix your credit score. However, you must not go for such services, as they are very expensive and is not legal for everyone. Instead, you must fix the credit scores by yourself. During the process, you will acknowledge your mistakes and try not to repeat them in future.
- Go for a secured credit card: Given only on the fixed deposits, a secured credit card may help you greatly in rebuilding your credit scores. Therefore, make sure to apply for the same.
Once you get your credit scores back on track, make sure you maintain your credit limit. This way, you can keep your credit balances low.
