Once you have completed your bankruptcy, you might be avoiding using credit. However, you need to re-establish your credit! Rebuilding your credit after bankruptcy is possible, but it will also take discipline and work on your part. Remember, discharging debt and high balances through bankruptcy makes it much easier to reestablish an improved credit score! So, how can you rebuild your score?
Mapping out your expenses on paper/spreadsheet is a simple way to keep on top of your spending. You will want to avoid unnecessary expenses. So, make a list of your most essential expenses. Adjust your spending with a new focus only on the essentials. Remember, little things can add up quickly, so a budget helps you to cut out any unnecessary expenses.
2. Pay off balances on time
This is essential to repairing your credit. After a bankruptcy, the credit-scoring bureaus will keep an eye on you. So, if you make a payment that is even one day late, the bureaus will assume you have not learned any lessons. You MUST pay your bills immediately every single month. By keeping your balances low, you will be able to pay them off in full each month.
3. Check your credit report
Be sure to do this with each of the three major credit bureaus (Equifax, Experian, and TransUnion). This helps you be sure that your credit reports are accurate. You can receive a free credit report every 12 months, if you request one. You can click here to request one or call 1-877-322-8228. If you come across incorrect or incomplete information, notify each of the credit bureaus. Fixing these mistakes can help improve your credit score.
4. Get a secured credit card
After bankruptcy, you need to show that you are able to build and maintain good credit. A secured credit card is a great option to do so. It works similarly a debit card in that you pay the bank a security deposit prior to using the card. But, all the payments made are reported as credit.
If you want to continue using a secured card in the future, you can even ask to have it switched to an unsecured card. When getting an unsecured card, be sure to avoid high “start-up” fees to keep from going back into debt.
5. Use a gas or retail credit card responsibly
First, only spend what you can pay off each month. Getting a gas or retail card can give you the opportunity to report good credit at the places that you will normally be spending money. However, make sure that these transactions are reported to the three-main credit-scoring bureaus. Also, make sure that you are spending responsibly and repaying on time.
Want More Information?
If you have more questions about what to do about your credit score after bankruptcy, call our office to schedule an appointment today.