So you’ve filed for bankruptcy and the process is now complete; your debts have already been discharged and you’ve been granted a fresh start. Now what? Rebuilding your credit after bankruptcy requires financial discipline and smart decision making. In fact, the financial moves you make after filing for bankruptcy can even improve your credit score quicker. However, poor financial decisions will produce an adverse effect and drop your credit. Here are a few tips for improving your credit after bankruptcy:
Check Your Credit Reports
Following your bankruptcy, you will want to review your credit reports about three months out to check your credit status. Primary elements you will be inspecting are discharged debts and closed accounts. You want to make sure that every debt has been properly discharged, accounts closed and statuses properly reported. TransUnion, Experience and Equifax provide free credit reports once a year. If you find discrepancies, contact one of the credit reporting agencies to correct any mistakes.
Pay Your Bills on Time
More than one-third of your credit report is comprised of your ‘paying habits.’ This means that the largest factor in your credit score is determined by how well and often you make your payments on time. To improve your credit score and improve your score quicker, make sure you pay your payments on time – every time. A lengthy period of time highlighting a positive payment history is the quickest step to improve your credit report after filing for bankruptcy. By demonstrating your ability to pay on time over the course of several months, you are signaling to creditors that you are responsible and in control of your budget.
Create New Credit and Use it Wisely
Many companies and banks offer products and services to help rebuild credit. Speak with your bank representative to determine what options are available to you, as well as what options are best suited for you. Once you are approved for these credit rebuilding solutions, use your credit wisely. Use only a tiny fraction of your credit and most importantly, pay it back on time. This will indicate your ability to manage your credit and spending wisely.
If you have filed for bankruptcy or are considering filing, speaking with a bankruptcy lawyer who can educate you on the filing processes, as well as the pros and cons of such a decision. Your legal counsel can usually also recommend post-bankruptcy credit rebuilding opportunities available to you.