Is there any hope for good credit after bankruptcy? The bankruptcy process was probably stressful enough. But the aftermath (bad credit) of a bankruptcy filing can be challenging as well.
If you recently filed for bankruptcy, you may be wondering how to rebuild your credit score. But there is hope! With patience, commitment, and an understanding of what is necessary, you can look forward to having good credit reflected on your credit reports again. Several strategies can help you rebuild your credit after a bankruptcy, and this blog post will discuss six of them.
Six Strategies for Rebuilding Credit After Bankruptcy
Strategy #1 – Pay all of your bills on time and keep your accounts in good standing
One of the vital things to do as you rebuild your credit score after bankruptcy is to pay your bills on time. On-time payments should include:
- Car loan payments.
- Mortgage payments.
- Payments on student loans.
- Any other debts you may have.
You should keep your accounts in good standing by making the monthly payments as agreed and not exceeding the credit limits. With time, this good credit history will show creditors that you are responsible.
Strategy #2 – Sign up for credit cards – even if they are secured credit cards
An excellent strategy that may boost your credit score after bankruptcy is to sign up for more than one credit card. Until your credit scores improve, many credit card companies may require you to start with a secured credit card, which means you may need to deposit money upfront with the credit card issuer. Try to find credit cards with no or a minimal annual fee. The credit card may also have a low credit limit until your credit scores improve. You need to keep your account in good standing and make timely payments. You should only apply for credit cards if you can pay the credit card balances off each month and you don’t carry a balance from month to month. These timely payments and low credit card balances will provide a good track record on your credit reports, which will provide an excellent opportunity for lenders to assess your character as a borrower.
Strategy #3 – Request credit reports from the credit bureaus
It’s crucial to request a free copy of your credit report from each credit bureau and read them closely for errors or inaccuracies. The three major credit bureaus are Equifax, Trans Union, and Experian. After reviewing how each credit report portrays you, you’ll be able to request corrections as necessary with the credit reporting agencies.
If you want more than just the annual free credit report that each of the credit bureaus will give you, it might make sense to sign up for a credit monitoring service so that you can more closely track your progress toward rebuilding credit.
Strategy #4 – Improve your debt-to-credit ratio
As you seek to build credit, make sure that your debt-to-credit ratio is below 30%. In other words, your credit balances should not be more than 30% of the credit limits on your credit cards and lines of credit. So, if you have a credit card or credit line with a $10,000 credit limit, try to keep the balance you owe on that credit card at $3,000 or below.
Strategy #5 – Don’t close old accounts
Do you have credit cards or lines of credit that you don’t plan to use any more? Don’t close the accounts. Instead, keep them open. Not only can this help your overall debt-to-credit ratio (you have more credit available that you aren’t using), but it also may help to lengthen your credit history.
Strategy #6 – Consider the help of a trustworthy credit repair company as you rebuild after bankruptcy
If you desire help rebuilding your credit after bankruptcy, it may be worth your while to look into how a trustworthy credit repair company can assist. These companies are experts in the field and will know how best to navigate through this process with you. In addition, they’ll often offer a free consultation which will allow them to evaluate what they can do on your behalf.
Lion Fortress Credit offers Extreme Credit Repair, which focuses on helping you rebuild your credit score after bankruptcy.
Are you ready to build credit after bankruptcy? The key to rebuilding credit after bankruptcy involves following specific practices and being patient and committed. Following the six strategies in this blog post can help your credit score to recover after bankruptcy! In addition, as you build good credit habits and your credit score improves with the three credit bureaus, you will receive better borrowing interest rates and opportunities.