Top Ten Tips to Bounce Back After a Financial Fall

If you've faced bankruptcy, foreclosure, or any other serious financial setback, follow these ten tips as a way to begin to put your personal finances on the road to recovery.

If you've faced foreclosure, bankruptcy, or any other serious financial setback, you may be wondering how, or even if, you can get your personal finances back on track. Your credit score may have gone down because of your financial problems, which makes it harder to borrow money, rent apartments, and even find jobs. You may think it's difficult, or even impossible, to recover.

The good news is that, depending on your situation, you may be able to start to bounce back after a big financial fall by following these ten tips:

Learn from your mistakes. Making mistakes is a part of life, but it's learning from mistakes that matters. If you've gotten into financial trouble because of mistakes like spending more than you earn, now is the time to make a change and take action to avoid making the same mistakes in the future.

Even if you experienced a financial setback because of circumstances beyond your control, think about ways to reduce the impact of any future crisis, such as buying more insurance or saving more money.

Pay your bills on time, every time. A consistent history of on-time payments is important when it comes to improving your credit.

Reduce your debt load. Paying down your existing debt is also important to improving your credit. It also may make sense for you to consolidate your debt with a bill consolidation loan. Visit our Debt Consolidation page to learn more about debt consolidation.

Prioritize your spending. Food, clothing, shelter, and medical care are your most important necessities. Paying for those things is most important.

Improve your cash flow. Look at unimportant expenses that you can get rid of, things that you can sell for extra money, and other ways to cut costs and bring in more money.

Check and fix your credit report. Get a copy of your credit report and credit score to see where you stand creditwise, and also to check for and fix any errors. Getting your credit report and credit score is also a good way to track your progress in improving your credit.

Take on new credit in small doses. Even though you may be shy about using credit, it's important to establish a new credit history. A credit card or small personal loan may be a good way to start.

Look into refinancing your mortgage. Now may be the time to refinance your mortgage for a lower monthly payment, lower interest rate, or to change your adjustable rate mortgage to a fixed rate mortgage, which can free up extra cash to pay down debt or save for emergencies. For more information about refinancing, visit our Mortgage Refinance page.

Get help. Financial counseling can help you make a plan for recovering from a financial crisis and reducing the likelihood of a future financial crisis.

Protect yourself. Make sure you get any promises or details about any financial transaction in writing, and avoid agreeing to anything that seems too good to be true or too easy to do.

These are general recommendations not applicable to all financial situations. Every financial situation is unique. Further, the suggestions and recommendations contained within the content provided are not an assurance of any future result. Be sure to discuss your specific financial circumstances with a legal or financial expert. Contact us for more information.