Not only can bankruptcy affect your finances, but it can also have an impact on your credit score. While your score may be less than perfect after filing for bankruptcy, there are several strategies you can use to easily improve it.
1. Look Over Your Credit Report – Small errors on your credit report can negatively impact your score. After the bankruptcy process is complete, obtain a copy of your report, thoroughly review it, and dispute any discrepancies it may include.
2. Pay Bills on Time – Although this may sound like common sense, it is one of the best ways you can rebuild your credit following bankruptcy, since your payment history contributes to a large percentage of your score. To ensure your payments always go out on time, set up payment reminders or have funds transferred automatically out of your account.
3. Apply for New Lines of Credit – Once the bankruptcy process is over, it may be a good idea to start using a credit card for purchases. However, you should make sure you are able to pay off the bill in full every month. If you are unable to get a standard credit card, try applying for a secured card instead.
4. Keep Your Limits in Mind – Once you have a credit card, avoid reverting back to old practices that may have caused you to need to declare bankruptcy in the first place. Even if your credit limit is low, continue to use your card sparingly.
Although your credit score won’t skyrocket overnight, adhering to these guidelines will allow you to consistently build your credit after the bankruptcy process is over.
