How to raise your credit score after a bankruptcy discharge

You may feed doomed about your credit score after a bankruptcy proceeding. However, there are ways to raise it.

Declaring bankruptcy can be a very good option for individuals suffering with debt. However, after the process, filers may endure a blow to their credit scores. If you have recently filed for bankruptcy, it is important to work on rebuilding your credit. You can be proactive about remedying your score and improve it drastically within two years.

Find out your score

As you begin your journey to healthier credit, you must first know your official score. When you apply for rental agreements, car loans, credit cards and more, a financial agency will look at your credit history in assessing your financial fitness. For this reason, it is important to be aware of where you stand. Once you have a solid idea of your credit status, you can then begin the improvement process.

You should retain a copy of your credit report and ensure there are no issues via an online credit reporting service. Generally, you can request one free copy of your credit report per year from Equifax, TransUnion, Experian and other agencies.

Practice solid payment habits

According to Yahoo! Finance, payments make up over 30 percent of your official credit score. Therefore, to help raise your number, it helps to make timely payments. It may be easier to set up calendar reminders or an automatic payment system to ensure you make payments on time.

Apply for more credit

If you did not have a major credit card account during your bankruptcy, it may be time to get one. To begin, you may have to start with a secured card, which involves a security deposit. However, eventually, you can transition into an unsecured payment option.

Remember, you do not need to retain a balance on your credit card to build credit. It is best to pay off the card each month in full. This will help with budgeting.

Secure a loan

A few years after the bankruptcy proceeding, you may be ready for a loan. Of course, the interest rate may be higher at first. Nevertheless, once you raise your credit, the interest rate on loans will decline. An inexpensive car loan might be a good start. This will help increase your credit number.

Do not close accounts

While you may think closing credit accounts can help your financial situation, this is not true. Closing credit cards reduces the amount of available credit, thus lowering your score. Instead, it is better to keep credit lines open. If you fear spending, simply hide or destroy your credit card.

Set limits

Once you begin the process of rebuilding credit, it helps to understand your limits. You do not want to fall in the hole again. It is important to stay aware of balance amounts and always budget your money.

Building your credit takes time

The aforementioned tips can help build your credit score; yet, the process takes time. Do not give up. With the help of legal guidance and financial counseling, you can ensure that a better financial future is in sight.

Keywords: credit, score, bankruptcy, debt

Our Team

Aaron A. WernickAaron A. Wernick
My restructuring and insolvency practice focuses on helping businesses, investors, and individuals maintain current assets and business structure while reducing existing debt load.

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Alvin S. GoldsteinAlvin S. Goldstein
Achieving success means caring about my clients, often providing financial advice to address their whole situation, not just the bankruptcy.

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Jason S. RigoliJason S. Rigoli
I utilize my understanding of business and knowledge of bankruptcy law to help clients thrive in the future.

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Marc P. BarmatMarc P. Barmat
I always keep in mind how to provide the best financial benefit to my clients, helping them to retain as many assets as possible and move forward with their lives or businesses.

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Alan R. CraneAlan R. Crane
Whether in bankruptcy or divorce, my goal is to help clients find creative solutions to complex problems so they can move forward from a very difficult time to a brighter more secure future.

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Robert C. FurrRobert C. Furr
The Bankruptcy code is complex and constantly evolving. I give clients the benefit of expertise and experience in utilizing the law successfully to protect their interests.

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Charles I. CohenCharles I. Cohen
I feel like I've accomplished something when I help people navigate a difficult stage and move forward with their lives.

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