5 Secrets You Didn’t Know About Improving Your Credit after Bankruptcy

Many people think that filing bankruptcy means you will never have decent credit – or, at least, not for the next 10 years. The truth is, nothing on your credit report lasts forever. You can start to fix your credit immediately after your bankruptcy discharge. Here are 5 things you didn’t know could improve your credit after a bankruptcy.

1.) Getting Credit Cards

The easiest way to start to rebuild your credit is with a credit card.

The easiest card to obtain after a bankruptcy is a secured credit card. Secured cards are backed by a cash deposit you make. Make sure that the secured card activity is reported to the Experian, Equifax and Transunion.

If you are offered a traditional credit card, take it. Don’t worry about how low the credit-limit is, or how high the credit interest might be. Avoid cards that have an annual fee. Make sure however, that you are able to pay the entire card balance off, each month, for the credit you do use.

2.) Become an Authorized User.

Ask a spouse, adult child, close friend or family member to add you as an authorized user to his or her credit card. Make sure that the authorized user activity is reported to the three credit bureaus mentioned above.

Remember, this gives you the right to use the account, but you aren’t legally responsible. You will need to work out an agreement with the family member to pay your portion of the debt each month. If you fail to pay, you will hurt the credit score of the family member that helped you.

3.) Pay on Time.

Prioritize paying bills on time. Making just one late payment can significantly hurt your credit score, especially after filing for bankruptcy, so paying on time is key factor in your credit being fixed.

Take advantage of “auto pay programs” offered by most creditors and major banking institutions. Enrolling in these programs means each monthly payment is automatically deducted from your bank account, which helps you save time, avoid late fees, and build a positive credit history.

4.) Keep Your Credit Balances Low.

Keep your credit balances at 20% or lower of your total credit limits. High credit utilization results in significant lower credit scores and warns other creditors to be weary of increasing your credit limits or lending you credit at all.

5.) Check Your Credit Report.  

Obtain a copy of your three credit reports each year to check for incorrect information. You’d be surprised to learn how often collections are improperly reported. Dispute anything you don’t recognize or believe is incorrect.

These are 5 of the more common ways to repair your credit after bankruptcy. However, being a debt relief attorney in Miami, who has helped many people file for bankruptcy and fix credit issues, I know that there are many more ways to fix your credit after bankruptcy. To find out more about fixing your credit, or for other questions about the bankruptcy process, contact us today to setup a no-cost consultation.