Filing for bankruptcy can give you budgetary breathing room by discharging your eligible debts or reorganizing them into an affordable repayment plan. However, bankruptcy also has a negative effect on your credit score that lasts for seven to 10 years.

Fortunately, you can take these four steps to improve your credit after bankruptcy. Learning to use debt responsibly helps you lay the path for a solid financial future.

  1. Create a budget

Write down all your monthly expenses and compare this figure to your income. If you have little money left over after you pay your bills, you are at risk for getting back into debt. Cut out unnecessary spending so you can build an emergency savings account and meet other financial goals. Making timely payments on existing loans such as a mortgage or auto loan will also help improve your credit score.

  1. Get a credit card

While you may not receive approval for a traditional credit card after bankruptcy, you can begin rebuilding your credit with a secured card. With this type of card, you make an initial deposit that constitutes your credit limit.

As with a standard credit card, your good payment history will be reported to the three credit bureaus, boosting your credit score over time. Make small purchases and pay your balance in full each month to remain in good standing.

  1. Check your credit report

Errors on your credit report can lower your score. Check your file with the three major credit bureaus at least once a year and dispute inaccurate information. Monitor your score to make sure your on-time payments and responsible credit use have the desired effect.

  1. Be patient

Even when you are making all the right financial moves, it takes time for your score to improve after bankruptcy. As long as you closely you stick to your budget and commit to on-time payments on your existing accounts, your credit score will eventually rise back into a desirable range.

Filing for bankruptcy may seem scary, especially if you have a good credit score at the moment. However, if you are unable to pay your bills, it can also offer a fresh start.