Is there life after bankruptcy? Absolutely! Although you may think that your credit was ruined forever, it wasn’t. Here are the steps you can take to rebuild your credit:
- Pay all of your bills on time, even if it’s just the minimum payment. Make sure that you send in the full payment due every month, and that your payment reaches the company before the due date.
- Remember that all payments are important. Your credit report may include missed payments to various creditors such as your phone or electric companies or a debt buyer. Also, bankruptcy filings, failure to pay child support or civil suits can show up in the “public records” section of your report and hurt your credit.
- Don’t Max out Your Accounts—Don’t use up too much of the credit available to you. If you get an increase in your credit line, don’t spend it all at once—it is also good to have more credit available in case of emergencies.
- Show a Long Credit History—Keep your card accounts open, even if you pay a card off in full. This can help reduce your debt-to-credit ratio. It can also help you to maintain a relationship with your lender and possibly qualify you for better credit terms if the lender knows you have been a good customer. Your credit score takes into account the length of time your accounts have been open. You want to show a long history of borrowing and paying back money reliably.
- Only Apply for Credit You Need—Don’t take out or apply for too many loans at once. It can make you look desperate for money—not a good sign to lenders.
- Don’t Take out Too Many Types of Loans—Don’t take out new department store credit cards just because they are offering you a discount. It’s generally better to carry only a small number of cards at once and not apply for credit you don’t need. Plus it is easier to keep track of your payments with fewer cards.
