Smart Ways to Improve Your Credit

As you may have already learned, your debt doesn’t just have to do with you paying people back for money you borrowed. It can also seriously affect future purchases, such as buying a car or a home. Anytime you need to apply for credit, if you have a past with financial problems, then you may not be approved, or you may end up with high interest rates. Things become even more difficult in the aftermath of a bankruptcy. Remember that a bankruptcy will remain on your credit report for as long as 10 years, and that means it can damage your credit for a very long time.

While you cannot make the bankruptcy disappear, there are some things you can do to improve your credit in the wake of such financial difficulties.

To begin with, before you even file for bankruptcy, make sure you have an experienced bankruptcy attorney on your side. They will help you through the whole process and can ensure you come out the other side in the best possible manner. Additionally, your attorney will help you determine the best way to move forward with your finances in the wake of your bankruptcy.

If you have already filed, then here are some things that you can do to start working on getting a better credit score.

Apply for a New Credit Card

Tread carefully here. If you got into financial trouble because you built up debt on credit cards in the first place, then this could be dangerous ground that ends up causing you even more problems. However, if you had to file for bankruptcy because of a catastrophic event or crisis, then opening a credit card can be a good thing.

Part of your credit score is based on credit utilization ratios. This means how much available credit you have to use if needed. Having a new credit card that you do not carry a balance on will help improve this ratio and your credit score overall.

Take out a New Loan

While this may seem strange, it can actually be helpful. Part of your credit score is based on the different types of accounts in your name. So, taking out a small, fee free loan will improve the mix and can build up your credit score. This can be very hard to do since you went through bankruptcy, but it is worth checking into.

Keep an Eye on Your Credit Report

You need to look at your credit report regularly and ensure everything is being reported properly. If there are any errors, you need to work on getting them removed as soon as possible. Additionally, if you have been doing well with making payments on time, then you need to make sure these good marks are getting reported as well.

You can check your credit on your own, or you could also open a credit card that provides you with your credit score on your monthly statement. Either way, you need to keep up with things and ensure your details are accurate, especially after a bankruptcy.

Some people assume that a bankruptcy is the end of everything. They don’t think they will ever get out of the poor credit score. However, there is life after bankruptcy and it just takes time to rebuild your credit. Using this information can be helpful and can ensure you are making progress toward a better financial situation. Just make your choices wisely and do not let yourself get back into a debt cycle or you could end up with even more problems. Be smart and you can start improving your credit even while bankruptcy is still on the record.