5 Tips for Rebuilding Your Credit After Filing Bankruptcy
Credit is one of the most important aspects of our lives. We often take it for granted and don’t think about it until too late. If you’ve recently filed bankruptcy, then your credit score will be low, and you’ll need to rebuild your credit. This article discusses five tips on how to rebuild your credit through alternative credit after filing bankruptcy, so you can live a happy life without worrying about what this means for your financial future!
Table of Contents
Get a Secured Credit Card to Start Rebuilding Your Credit History
Once you’ve filed for bankruptcy, your credit score is going to be low. If this is the first time you have had a bad credit history, then it can affect your self-confidence and make things like buying groceries or paying for gas difficult.
You’ll need to start rebuilding your credit history before you’re eligible for an unsecured card (which does not require collateral). Secured cards are often available within about 30 days after filing bankruptcy, so apply for one of those as soon as possible!
The purpose of a secured card is to act as a partner in helping rebuild your credit report. By using the card regularly and making payments on time every month with no new debt added onto the account, you will start to see your credit score slowly improve.
Pay Your Bills on Time, Every Time
One of the best ways to rebuild your credit is by paying your bills on time, every time. This includes not only your monthly credit card and loan payments but also things like rent, utilities, and even phone bills!
If you’re having trouble making all of your payments each month, then it might be a good idea to set up automatic payments so that you never miss a due date. This will show creditors that you are responsible with money and can be trusted to make future payments on time.
Don’t Apply for Too Many Credit Cards at Once
When rebuilding your credit history after bankruptcy, it’s important not to apply for too many credit cards at once. The reason for this is that every time you apply for a new loan or credit card, the creditor will check your credit score and pull up your report to see if they want to approve you.
Don’t be discouraged, though! Just because one lender turns you down doesn’t mean others will – even within the same bank! If one department says no, try another until you find success. When applying for multiple loans/credit cards over a short period, make sure it’s spread out evenly so as not to give creditors any ideas about canceling current accounts due to too much debt being added onto their books all at once.
Keep Your Debt Levels Low Compared To Your Available Credit Limit
When rebuilding your credit history, it’s important to keep your debt levels low compared to your available credit limit. For example, if you have a total of $500 in debt and a credit limit of $2000 on all of your cards, then you are using 25% of your available credit. This is not good for your credit score!
Ideally, you want to keep your utilization below 30%. That means that you should only be using $300 or less out of the $2000 – even if it means spreading out the debt over multiple cards. This will show creditors that you’re responsible with money and can handle borrowing limits without getting yourself into too much trouble.
Monitor Your Credit Report Regularly To Ensure Accuracy
One final way to rebuild your credit history after bankruptcy is by monitoring your credit report regularly to ensure that it’s accurate. One of the best ways to do this is through CreditKarma.com, a site that lets you monitor all three major credit reports without having to pay any monthly fees!
This will help identify errors on your account so that they can be corrected immediately before doing too much damage to your score (especially if there are false accounts listed under “delinquent” or “breach”). If there are no problems with your report and everything looks good, you have nothing else left but time; and patience.
These are just a few of the things you can do to rebuild your credit after filing bankruptcy. If you ever need help or advice, feel free to reach out, and we’ll be happy to guide you through this confusing process. By following these tips, in about two years, most people will have their credit history restored enough that they’re able to apply for an unsecured card instead of having to rely on secured cards only. 5 Tips for Rebuilding Your Credit After Filing Bankruptcy