Once the proceedings in your bankruptcy case have ended and the case has been closed, you may feel as though your troubles are just beginning based on your bad credit score. Making efforts to repair your credit can make you feel like an unattainable goal, however there are ways to handle this situation without doing further detriment to your credit report. The trick here is to remain focused on the end goal rather than get wrapped up in every card denial you receive after your bankruptcy. You will need to find constructive ways to obtain a positive line of credit on your report that is going to continue to increase as the history of your bankruptcy fades. You will have to wait until the situation which resulted in your bankruptcy filing has been fully resolved before you may begin accruing positive credit.
Secure Yourself
One of the fastest way to build positive credit, however small the amount may be, is to obtain a secured credit card.
- These cards will not have an available balance unless you deposit money into them, though you will use them as if they are regular credit cards.
- This will keep you from “maxing out” your credit card and not being able to pay a monthly payment, because it’s your own money being used to secure the account.
- After using them for a long enough period of time, the credit card company will generally upgrade your account to a low-limit unsecured one.
Shop Around
After you’ve been using your secured credit card for a while, it can be helpful to begin applying with retail chains for their in-house credit lines. Typically these kinds of cards are easier to acquire than an unsecured major credit cards, and, depending on your spending habits, you aren’t as likely to default using them. Applying for these types of cards will tell you, depending on acceptance or denial, whether or not you’re ready to begin applying for an unsecured credit card from a major credit company.
Installment Credit
Variety on your credit report, as long as it’s responsible, is a good way to show the credit industry that you are stable in your credit standing. This can be shown by applying for a small car or personal loan in order to obtain an installment account on your credit history. If you decide to obtain this type of account, it’s important to apply with a reputable lender, and borrow an amount you know you can comfortably pay off.
Once you’ve gotten all of these different forms of credit after a bankruptcy (usually this process will take anywhere from 3 to 5 years), the time will come when you feel you’re ready to apply for an unsecured credit card. Find out what option, with what company, is your best fit, and don’t be afraid to set your own limit. Soon, your bankruptcy will have disappeared from your credit report completely.
Getting Help
Before, during and after bankruptcy, you should feel free to use your bankruptcy attorney as a resource to answer all of your questions. Your attorney can help you to explore which type of bankruptcy is right for you and will have the least detrimental impact on your credit, and after your bankruptcy, he may be able to give you tips and advice on what you can do to improve your credit score.
