Bankruptcy Credit Repair: 4] Tips for Recovery

Bankruptcy credit repair is important, as a bankruptcy filing can do serious damage to your FICO score. Your FICO, or credit score, is affected by your payment history, including a record of late payments or judgments against you (this is worth 35% of your score). Other factors, such as the amount of debt you use (30%), the age of your cards (15%), the types of credit (10%) and the number of inquiries (10%) also play a major role in determining your score. Bankruptcy can do damage to many of these categories, since your accounts will be closed and the bankruptcy will show up on your credit report for 10 years. Fortunately, there are some bankruptcy credit repair tactics you can use and here are some tips to help you use them. 

Bankruptcy Credit Repair Tips

To repair your credit after bankruptcy:

• You need to get credit. Repairing your credit without getting credit is impossible. It may be hard to get a card or other loan, but you should be able to start with a secured card (a card where you put up cash in the same amount as your credit line to act as security). 
• Use your credit wisely. When you get a secured card, the interest rate is going to be very, very high. You may also have to pay an annual fee. This is OK- the purpose isn't to use the card and the fee is worth it to build your credit (just make sure the secured card company reports to all 3 major credit bureaus). Simply use your credit card on a monthly basis to make a small purchase and pay off the balance, in full and on time, every time
• Don't fall into traps. There are plenty of people who try to prey on those who have gone bankrupt. You may, for example, find yourself the subject of predatory car loan lenders or other lenders. Avoid these creditors at all costs, since you could end up hurting your credit even worse. Limit the amount of credit you have to a carefully chosen secured card and slowly build up you credit over time
• Be patient. Raising your credit score takes time, but with careful attention to making payments on time, you can slowly build up your score

Getting Help

Bankruptcy is a difficult time in your life. You need the help of an advocate who is on your side. If you are facing bankruptcy, you should strongly consider speaking with an experienced bankruptcy lawyer. Your attorney can explain to you what is likely to happen before, during and after your filing so you will know precisely what to expect.