5 Ways To Rebuild Your Credit Score After Being Bankrupt

Bankruptcy can be a very painful time for anyone. However - bankruptcy surely doesn't mean it's the end of the world for you. While bankruptcy can have a major effect on your credit score - it won't mean that you'll never be able to avail of credit again. While the recovery process may be quite long and stressful - and sometimes you’ll only be left with nothing with your shirt on your back - or your pants and shoes - there is always light at the end of the dark tunnel. Here are five innovative ways for rebuilding your credit after being bankrupt.

Get A Secured Credit Card

Once your bankruptcy has already been discharged - slowly build back your credit - by getting a secured or prepaid credit card. A prepaid credit card can act like a debit card - where you put in cash - and you draw against it - and you reload the card again. Always make it a habit to not use more than 40 percent of your credit limit on any revolving loan.

Pay All Your Bills On Time

To build up your credit score after bankruptcy - remember to pay all of your bills on time. From credit card - telephone and utility bills - to apartment rentals and even parking ticket fines - always ensure that you're not weighed down by too much debt. Some creditors have been known to look at their customer's bill payment records - so that they can establish your willingness to pay.

Get Installment Loans

Next - get an installment loan - such as a car or appliance loan. This can be a nice start towards rebuilding your credit score. Once you've gotten approval - pay off the loan in the quickest time possible.

Evaluate Your Credit Report For Errors

Your credit report must still need to be fully evaluated - even if you've already been declared to be bankrupt. Check out any errors or inconsistencies on your credit report - because any negative item is only allowed to be reported for 7 years. Should you spot any inconsistency or discrepancy in your report - this should be removed or erased immediately.

Keep Off Any Overdraft Fees

To steer clear of overdraft fees - always make it a habit to balance your checkbook against your monthly statements - and always keep records of the items you purchase - or the services you’ve availed of.

It would also help if you say no to having a “co-signer” to your credit. By having co-signers show-up on your credit report - it may actually weaken your case with future creditors. Once a creditor sees that you’ve had a co-signer - they’ll see you as a high-risk client - and will also ask that you get a co-signer for their loan too. These times - a person’s financial future greatly revolves around those three little numbers that make up a credit report. A good score indicates that you are financially stable - and is in good standing for applying a loan - or any form of financing. A low or poor credit score will only serve to add more headaches to your financial standing.