Your credit score takes a big hit after bankruptcy, but you can do things during and after to rebuild your credit. Just because you filed for bankruptcy doesn’t mean that you have to have a bad credit rating. It just means that you have to do a few things that improve your situation. Here are a few strategies recommended by the team at Kain + Henehan to help you rebuild your credit after bankruptcy.
Make Payments On-Time
The most important thing that you can do is to make your payments on time. Repeating payments, like bills or credit card payments, are the biggest part of your credit score. Although each payment provides a small boost to your credit rating, you can make many of these small payments over time. The overall effect is that your credit score will gradually climb as long as you are making your required payments on time.
Add One New Line of Credit
In many bankruptcy cases, most of the credit accounts that you have may be closed. Even if you manage to pay the debts back, there is a chance that your accounts will be closed anyway. You can open one new line of credit that you can afford and start making payments to that account to raise your credit score.
Make one-time payments by purchasing something that you can afford using your credit card, then pay it off on the next payment cycle. To the credit agencies, this shows that you are consistently making payments in line with your agreements, which can raise your score.
Correct Errors on Your Credit Reports
With so much activity on your credit reports in a short time, it would not be unheard of for there to be errors on your credit report. These errors can affect your score, and you want to correct them to raise your score again.
You can do this by requesting your credit report from the three major bureaus. When you find an error, contact the bureau for that report and follow their process for reporting problems. Once corrected, your score will adjust accordingly.
Work With a Bankruptcy Attorney to Limit the Impact
You can offset the impact of filing for bankruptcy by working with an attorney ahead of time to prepare. There may be things that a bankruptcy attorney can do to protect your credit score and help set you up for a faster recovery. Contact Kain + Henehan at (612) 438-8006 or complete the online form. We can help you with the bankruptcy process as well as understand what happens to your credit score.
