Using Credit to Rebuild After Bankruptcy

Credit report repair after bankruptcy may seem like a glimmer of hope at the end of a long, arduous tunnel.  After a Chapter 7 or Chapter 13 bankruptcy, your credit will remain affected for up to ten years after the file is closed.  This can seem like a prison term of sorts because rebuilding credit or qualifying for credit or loans may feel like an impossible task.  The good news is that with a little education and a sound strategy, even after a bankruptcy, you can qualify for loans or credit with decent rates and terms.  The better news is that they can do this while you raise (your) credit score in the meantime.

First, it’s important to realize that when your bankruptcy case is closed, you can begin to improve your credit score.  Do this by using your credit cards wisely to rebuild your credit score.  If you are having a difficult time qualifying for credit cards, consider applying for a “secured credit card.”  Secured cards cater to those with damaged credit and are an excellent option for creating a solid credit history.

Moreover, since using credit wisely is such a key piece for rehabbing your credit score or bad credit repair, it’s important to understand what exactly that means.  Using credit responsibly includes: Paying bills on time and ideally paying off your balance every month; If you carry a balance, make sure to make it only a small portion of the total credit you have available.  For example, with a $5,000 credit limit aim to use only 10%, so ultimately your balance shouldn’t exceed $500.  Also, keep in mind that while switching to a cash-only system can be really helpful for those who cannot handle credit wisely or for those who already have excellent credit, for improving credit, establish a solid credit history by using your credit cards in a strategic way.

Finally, after a major life event like a bankruptcy, you may want to consult a reputable credit repair agency for credit repair advice.