While rebuilding your credit score after filing for bankruptcy will take some diligent attention and prudent financial planning, the good news is that anyone who does file for bankruptcy can improve their credit score by following some clear, straightforward steps. First and foremost, one thing that you should avoid doing when trying to rebuild your credit score following bankruptcy is avoid making any unnecessary inquiries on your credit report; these can further damage your credit rating – even if you are paying all of your bills on time.
Secondly, apply for a secured credit card with no or minimal fees at a bank or local credit union, and make sure that the credit card is reported to one or all of the major credit bureaus – TransUnion, Equifax and Experian. If the card is not reported with any of these agencies, pass it up and apply for one that is, as this will be key to re-establishing your credit score.
If you are diligent on paying off this debt, within a given amount of time (typically 12 to 24 months), you will likely be eligible for an unsecured credit line, which means that you do not have to give any money upfront in order to open up this line of credit. Again, paying the monthly payments – ideally more than the minimum – in a timely manner will be key to possibly increasing your line of credit and improving your credit score. The higher the line of credit and the lower the amount of debt you have, the more likely it is that your credit rating will increase.
The overall theme is be patient and be persistent; if you are in the process of filing for bankruptcy or are coming our of a bankruptcy, our savvy financial experts can help advice you on strategies for getting through bankruptcy, rebuilding your financial health and avoiding future bankruptcies.