How to Improve Your Credit Score After a Bankruptcy

Cleaning your credit card up after a bankruptcy is always a challenging task. To get the desired results, consider it necessary to gather your wits first, learn from your mistakes and then be ready to bounce back.

Learn from your mistakes

When you come to think of it, your bankruptcy is often a product of financial moves not carefully thought through. Review your past activities and check your payment pattern and debts and credit history. Were you paying out high interest payments? Did you overspend? Were you not able to manage medical bills or any other expenses efficiently?

Rather than shut yourself off from your past financial activities, make good use of them by learning from them. After all, what you really have to assess is your attitude towards your finances, personal or business.

Clean up your credit report

After a bankruptcy, you'll notice reports on your accounts designated as open and overdue when, in fact, they have already been closed and wiped out as part of the bankruptcy.

Cleaning up your report after a tumultuous financial activity is a tedious task. But since you do not have any choice but to do it, make it a goal to correct all data in your record immediately.

To do this, you need to contact major credit reporting bureaus and request that the accounts be reported as "included in bankruptcy." There's no other way to recover your credit than doing this step. The contents of your credit report determine your score so better clean up your report before it's too late.

Use credit card to build credit

Do not use just any credit card. Get a secured credit card. Following bankruptcy, you would actually find it hard to qualify for a regular, unsecured credit card. So the best option left is to get a secured card with a credit limit that's equal to an amount your deposit at the issuing bank.

Manage your secured credit card efficiently by paying the balance off in full every month and by using it lightly. As a rule, never ever spend more than 30% of your credit limit. This will make it easier for you to pay the balance and build your credit. Make it a habit to not spend more than you can pay off every month.

Finally, do not just get any secured credit card. Look for those that charge a reasonable annual fee and reports to the major credit reporting bureaus. It's also a plus if the bank allows for converting a secured card to an unsecured one after a year or so of regular payments.

Source by Daniel Walton

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