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How To Build Credit After Bankruptcy

6 February 2015 by Yolanda Lane

Filing bankruptcy isn't the end of your financial life. A lot of people need help digging out of their debt, and for quite a few, bankruptcy is the answer. You aren't alone in your bankruptcy filing, and you will have good credit again, but ou have to build it back the right way. See below for tips on how to build your credit after filing for bankruptcy.

Apply For Credit

Yes, that's right, apply for a credit card. You don't have to use it, just apply for a card. The interest rate will probably be high at first, since you are considered a sub-prime borrower. You will probably qualify for the credit card, since you aren't able to file for bankruptcy for at least another 7 years. You can ask for your interest rate to be lowered after holding your card for six months to a year. If you use your credit card, do so with smaller purchases and pay the balance off quickly, and on time.

Inspect Your Credit Report

Be sure to get a copy of your credit report after filing for bankruptcy. Inspect it for errors and be sure that any debt included in your bankruptcy states on your credit report that it was included in bankruptcy and doesn't say anything negative. Contact the credit bureaus immediately if there is an issue to have it cleared up. You should inspect your credit report regardless of filing bankruptcy to look for fraud or errors.

Pay Loans On Time

Any secured loans, such as home loans or auto loans, that you may have reaffirmed in your bankruptcy should be paid on time each and every month. Pay extra whenever possible on these types of loans. Paying extra will help lower your principle balance, which looks better on your credit report.

Start Saving

Open up a savings account if you don't already have one. Start putting aside money into the account for an emergency fund. The balance will show on your credit report, which will be a plus when trying to get credit later down the road. Putting away money should be fairly easy after bankruptcy since you are essentially debt free.

Building credit after bankruptcy can be done, and you will have a good credit rating again. It will take some time, so don't fret too much about it. Be sure to keep your debt to income ratio down, start putting money away and pay attention to your credit report for errors. 

If you have other questions about your bankruptcy filing, talk to an experienced bankruptcy lawyer from a firm like Liviakis Law Firm.

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