Rebuilding Your Credit Score After Bankruptcy
Helpful Tips and Tricks from the FTC on how to rebuild and improve your credit score after bankruptcy.
So you’ve eliminated your debt, what now? One thing that separates the attorneys at Detroit Lawyers from others is our full-service approach. Not only are we concerned with fixing the problem (overwhelming debt), but also making sure you have the tools to build future financial stability. One of the keys to your future financial success is your credit score. Our office is committed to helping you to improve your credit as quickly as possible following your bankruptcy.
Easy Steps to Raise Your Credit Score
Immediately after receiving your discharge, it’s important to start rebuilding your credit. The following steps will help you on the road to financial freedom.
1. Ensure accuracy of your credit report. You can get one free report a year from each bureau. The three bureaus are Equifax, TransUnion, and Experian. Make sure the status of the debt says discharged in bankruptcy and the balance of the account is reported as $0.00. You should also take the time to find out why you were denied credit.
2. Budget for necessities. Take the time to figure out how much money you absolutely must spend every month – rent, food, gas, utilities, transportation, insurance, etc. Only the necessities.
3. Open a new checking and savings account. If you do not already have a checking and savings account, open one of each at a local bank or credit union.
4. Apply for a secured credit card. A secured credit card functions very much like a debit card. You pay the bank the money before opening the card, but your payments will be reported to the three major credit bureaus and go toward increasing your credit score.
5. Pay ALL your bills on time. Having an outstanding balance is not good for building your credit score. Mark your calendar, put reminders in your phone, do whatever it takes to make sure you pay your bills on time and don’t miss any deadlines. If you can set up automatic bill pay, do it!
6. Add an installment loan when you can. A car loan or line of credit is a great way to build your credit score. Be sure to shop around and avoid to high interest rates. Again, it’s vital that you make all of your payments on time.
7. Get a new credit card. Contrary to popular belief, there are credit cards that approve applicants who have a bankruptcy on their credit report.
8. Keep low credit card balances. The best way to increase your credit score is to keep your credit card balances low. Consumers with excellent credit only charge 30% of their credit limit on each card. If you can charge less than 10%, even better!
9. Be patient and persistent. Take the time to make sure you rebuild your credit the right way. One missed payment can set you back months. It takes time, but you can achieve an exceptional credit score over time.
For more information on credit score repair after a Michigan bankruptcy, contact one of our bankruptcy lawyers at 248.237.7979.