How to Improve a Credit Score After Bankruptcy

Bankruptcy will drive your credit score way down. If you declare bankruptcy, most creditors will be wary of lending you money or extending you any credit. You will have to work hard to get your credit score back up.

Instructions

1. Pay your bills on time and in full. After a bankruptcy, the most important factor in improving your credit score is creating a good payment history. Setting up automatic payments from your checking account can be a good way to avoid mailing bills late or missing payments entirely.

2. Obtain an updated copy of your credit report and make sure that all discharged debts are listed as having no balance remaining on your report.

3. Apply for a credit card. Because of your recent bankruptcy, you may have difficulty finding a credit card company that will issue you a card. Any potential card is almost certain to have a very low spending limit and very high interest.

4. Get a secured credit card if you cannot find a traditional credit card with rates you can afford. Secured credit cards require you to put up money equivalent to your spending limit as collateral. Typically, after a year or two, if you've paid your balance in full every month, you will be able to get a regular credit card.

5. Avoid making the same mistakes again. Don't repeat the errors that forced you into bankruptcy. Take the time to learn how to budget and make good financial decisions.

Tips & Warnings

• Even small steps will help improve your credit. A very small credit line is still credit and will give you the opportunity to show that you can handle it responsibly. If you do well, it could help you earn more credit.

• Rebuilding your credit after bankruptcy takes time.

• It is harder to improve your credit if you are self-employed or change jobs often. Lenders take your job status into account and if you've been employed with the same company for a long time, you'll look better to them.

• A bankruptcy will stay on your credit history for up to 10 years.

• A history of delinquency from before your bankruptcy will remain on your credit history, although any debts should be listed as no longer outstanding.

• Because it is so difficult to get any type of credit or loan after a bankruptcy, some lenders will specifically target you with offers of credit with very high interest.