So you decided to declare bankruptcy. You got in touch with a great bankruptcy attorney. He filed on your behalf. You received your discharge and you haven’t felt this financially free in a long time. Your next step is to make sure that you keep that freedom. You adopted a new budgeting system that is working for you and you carefully monitor household expenses in comparison to income. The only thing left is to do what you can to repair your credit score now that you’ve got all your ducks in a row.
6 Things You Can Do to Repair Your Credit Score after Bankruptcy:
- Monitor Your Credit Report for Errors: sometimes errors are the result of another individual with the same name as you and sometimes it’s a result of identity theft. Regardless, check it regularly to make sure that information is accurate.
- Limit the Number of Credit Cards: Once you start receiving credit card offers again (and you will) limit the number of cards that you decide to take advantage of. Don’t take out too many. Taking out too many will leave you labeled as a “credit seeker.” It’s a less than desirable label for anyone who wants to repair his or her credit or maintain a good credit score.
- Keep Your Debt Low: You don’t have to carry debt on your credit cards in order to see positive payment history reported back to the credit reporting agencies. You’ll hear all sorts of advice on how much of your credit you should be using at any given time, but it’s really very simple. The less you use the better.
- Make Multiple, Smaller Payments: You don’t have to wait until the end of the month to pay your bill off in full. Make little payments throughout the month. It helps to lower your debt quicker and helps lower your debt utilization ratio (accounting for about 30% of your credit score).
- Never Fear the Credit Line Increase: You don’t have to be afraid to ask for a credit line increase. Obtaining one will improve your credit utilization ratio (mentioned above).
- Use Your Cards: Having a credit card won’t do your credit report any good. You have to use it for it to have any effect on your credit. You want to use it and pay if off; show them that you can use credit responsibly. If you close credit card accounts when you’re not using them, it will bring your credit score down. Keep them active so you have as much credit history established as possible.
Declaring bankruptcy to obtain a fresh start got you to an excellent starting point. Now it’s time to make the most of it. If you need advice on how bankruptcy law applies to your financial situation or how to repair your credit after bankruptcy, contact the southern California bankruptcy law experts at Westgate Law.