How to Improve Your Credit Score After Filing for Bankruptcy

Filing for bankruptcy can cause your credit score to go down drastically. Worse, it can affect the overall quality of your life for quite a long time. Once you have filed for bankruptcy, you are no longer considered creditworthy by lenders and you may find it hard to get approved for credit cards, car loans, and house loans.

Fortunately, there are ways by which you can improve your credit score even after filing for bankruptcy. Such means, while simple, may be able to help you raise your credit score back to the way it should be.

Below are some of the tricks on how you can improve your credit score after filing for bankruptcy:  

Check Your Credit Report

Credit reports may contain errors about your credit and payment activities. Such errors can drastically affect your creditworthiness. As such, it is recommended to check your reports regularly and to make sure that everything is being reported there as is.

It is important to note that your credit report does not contain your credit score. However, you can verify its contents to make sure that all items are correct. Each account in your bankruptcy declaration should be identified as “included in bankruptcy” or a similar phrase. You can file a dispute if one or more accounts are still currently being hold as debt.

Have a Budget Plan

Always have a budget plan. Especially that you have declared bankruptcy, it is even more important to keep a budget plan to help you track and budget your finances. A household budget that tells you how much you spend on specific things, such as household expenses, loans, groceries, and the like, is a good start. If you have any credit card open, strive to pay the bills on time. Never delaying payments can help boost your score.

Use a Secured Card

Although it makes sense that you should not open any credit card account for the time being, a secured card is an option, especially if you have closed all your accounts. This is a type of credit card, but does not work the traditional way. Instead of you borrowing money with the potential of getting into debt, a secured card does not pose such risk. You need to provide a security deposit, which will, in turn, limit the amount of money you spend.

Set Up Payment Reminders

You may have student loans, mortgages, credit card bills, and others that need to be paid off on time. You can use a payment reminder tool, which will notify you of pending bills that you have to pay right away. You can also choose to pay for the bills automatically by linking to your savings account.

If you follow the right path after filing for bankruptcy, it is possible that you will be able to regain your good credit rating. Paying credit card balances on time and making sure that you have enough money to fund your daily expenses can make a huge difference.