5 Ways to Repair Credit After Filing for Bankruptcy

Many people believe a myth that filing for bankruptcy will deteriorate their credit forever. While we can understand why you might think so, we contradict the statement. While bankruptcy can do some damage to your credit report, it’s not going to leave a mark forever. You can always bounce back to get your standard of living on the right track.

No damage to your credit report is irreparable. It just takes some tactics and discipline from your side to bring your credit score back to its normal place. Also, you need a bit of patience as it takes a few months to improve the credit score. Eventually, we believe that you can always get rid of the adverse remarks on your credit report. And if they are inaccurate, the article has some productive insights on how to rebuild credit after bankruptcy. 

Go through these insider points. 

Steps to improve your credit after bankruptcy

While it might sound easy till now. It’s not. One might believe the challenging part after reading the following points. 

• Handle non-bankruptcy accounts normally

While one of your accounts has been filed for bankruptcy, you can always handle the others usually. Your repayment habits for all other loans should be healthy, and the installments should be paid on time. If you have taken a student loan, it cannot be discharged. You’ll always have to pay it in time no matter what the situation is. 

It’s to avoid any further negative information in your credit report. Sometimes, some of your accounts might not reflect on the credit report. Don’t take it as an excuse to not pay them regularly. Your goal is to create trust among the creditors. And there’s only one way to it, and that is regular repayment. 

• Find ways to get a new credit

Credit cards after bankruptcy are a great idea if companies find that you are trustworthy. Sometimes you find it challenging to get these new opportunities post-bankruptcy. The only approval basis for most credit cards is that you cannot legally file for bankruptcy for another 7 years. It almost ensures that the repayments will be on time. 

If you go for the credit card, always look for the secured counterpart. The difference is that you need to deposit security first that the issuer will keep. After you make some regular payments, it will be converted into an unsecured credit card. 

• Make sure your credit report shows only accurate negative information

This is where the role of credit repair comes into the picture. Your credit report should reflect only accurate negative information about you. If there’s anything wrong, you should file a dispute right away. You cannot just let that information deteriorate your image in the market. The advantage of filing a dispute is that the concerned authorities will check into your past. And if they find anything contradictory, you can always improve your credit score.  

However, filing for disputes isn’t that easy. Before that, you need to detect if there’s any wrong negative information. This process takes some experience and familiarity with the terms and conditions. So, make sure you have the backing of a credit repair agency. 

• Keep the balances low

The credit card balances greatly testify about your repayment habits, according to credit reporting agencies. The balance you pay for every month should be low rather than reaching the limit. The total balance should not be more than 30% of your limit. If you can keep it below it, it’s even better. The process helps you rebuild your credit faster. 

For that, it would help if you have two or three credit cards. Use all of them and repay them on time. Keep the limit to recommended levels. 

• Do not apply for new credit haphazardly

A part of your credit score deteriorates if you make a new credit application, then they get rejected. Apply for only those opportunities that you think will most probably not turn you down. Even if you’re desperate for credit, make sure you think realistically. Only practical applications have a good chance of being accepted. And even after that, you need to assure that the payments will be made on time. You might be charged a higher rate of interest for new loans. 

With these five tactics and your patience and discipline, you can always get back on track even after bankruptcy. After all, the stakes are really high, and you have a good chance of scoring.