How to Improve Your Credit Score After Declaring Bankruptcy

While bankruptcy may feel like the end of the world, it can be the fresh start you need to reach  your financial goals. Bankruptcy is your first step to reestablishing a good credit score.  However, your credit score will not improve with the snap of your fingers; it requires your time  and effort. 
Below you will find ways you can improve your credit after bankruptcy. 

How is a Credit Score Determined? 
A credit score is a number ranging from 300-850 that dictates an individual’s worthiness for  credit. When a person’s score is higher, they are more likely to be given credit opportunities.  They are more attractive to a creditor than someone with a lower score. The number is based  on credit history, which is comprised of how many open accounts, levels of debt, and  repayment history. A credit score helps determine the likelihood of the person paying off their  debts on time. 

Repayment of Debt 
While bankruptcy can eliminate plenty of debt, it does not erase all debt. Secured debts,  specifically, will survive filing bankruptcy and are still required to be paid back. Debts that are  not discharged are still reported to credit agencies and can either help or hurt your credit  score. Begin improving your credit score by paying these debts off on time. For example, if you  file for Chapter 7 bankruptcy and have a car loan, but you would like to keep the car, you can  continue making payments towards the vehicle according to the terms in your loan documents.  These payments, if made on time, can help improve your score. 

Use a Secured Credit Card 
Using a secured credit card can help rebuild your credit score. A secured credit card requires a  deposit to the creditor that equals (or nearly equals) the maximum credit line available. If you  stop making payments, your deposit acts as a safety net, and the lender will keep the deposit  as payment. It is similar to a debit card, as there are funds to back up the charges. But unlike a  debit card, in that, a secured credit card will help improve your credit if repayment happens on  time. Secured credit cards appear as standard credit accounts on reports. 

Engage Other Credit Types 
To improve your credit score, try employing other types of credit. While many lenders are  uninterested in offering credit to someone who just filed bankruptcy, others are marketing to  those emerging from bankruptcy. Even though you are considered a risky buyer, you may be  able to reestablish your credit score by getting a new loan and making payments on time. 

Contact The Law Offices of Charles W. Daff 
Filing for bankruptcy can be the fresh start you are seeking. If you are in the Santa Ana,  California area and are considering filing for bankruptcy, contact The Law Offices of Charles W. 

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