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If you just went through a bankruptcy, your credit score is most likely not in its best spot.
That’s why we decided to create this short informational article about repairing your credit score after bankruptcy.
How Much Time Will It Take To Improve Your Credit Score After Bankruptcy?
Unfortunately, it’s very hard to give an exact timeline for how much time it will take you to improve your credit score after bankruptcy.
Basically, everything depends on your individual situation: whether you’re able to get other credit, your financial habits, etc.
The main thing that you need to keep in mind when trying to repair your credit score is consistency is key. You need to apply the tips in this article consistently for them to help your credit score.
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8 Tips To Repairing Your Credit Score After Bankruptcy
1. Keep An Eye On Your Credit Report
We strongly recommend that you install an app on your phone to keep a close eye on your credit report & history.
This way, if there’s any fraudulent information or just plain errors, you will be able to act quick before your credit score is affected by the issue.
There are tons of way to keep an eye on your credit report, the most popular ways are through easy-to-use smartphone apps like CreditKarma or directly through the credit bureaus like Equifax or TransUnion.
2. Pay Your Bills On Time
After a bankruptcy, your credit score is most likely at its lowest. One of the best ways to start slowly building it back up is buy paying your bills on time.
Yup. It’s as easy as that.
Just paying your bills on time will have an absolutely HUGE effect on repairing your credit score after bankruptcy.
Why?
Because by paying your bills on time, you will be sending positive signals to your current and future creditors.
3. Start Borrowing ASAP
Even though this advice sounds counterintuitive since you just declared bankruptcy a couple months, weeks or even days ago. Figuring out a way to borrow will help you immensely in your credit score repairing journey.
By borrowing you will start rebuilding the trust with the creditors and, at the same time, improving your credit score.
But be careful, be very cautious when borrowing after a bankruptcy. Create a budget and never borrow more than you can afford to pay back. Don’t repeat the same mistakes twice.
Read more: How Can I Raise My Credit Score By 200 Points In 30 Days?
4. Make Sure That Your Payments Are Processed On Time
It’s not only important to pay your bills on time, but also making sure that your payment is processed on time is actually even more important.
In fact, did you know that when you’re paying your bill 1 day before it’s due (or even on the day of), your payment is usually processed in 24-48 hours! Meaning that you may think that you’re paying the bill on time, but in fact are paying the bill late and, therefore, reducing your credit score and holding you back in your credit repair journey.
5. Increase Your Credit History
Having a long credit history is another characteristic that proves stability and shows trustworthiness to creditors.
Basically, in the future, we strongly recommend not closing any credit accounts right after you’ve finished paying them. This is especially the case for free credit cards, why cancel them if they don’t even cost anything to you?
The longer your credit history is, the better your credit score will be.
6. Never Use Too Much Credit At Once
Did you know that you need to keep a healthy credit utilization rate to send good signals to credit bureaus?
In fact, it’s recommended to keep a credit utilization of 30% (or 35%) or less. Never go above that rate.
But what is a credit utilization rate?
It’s actually very easy, let’s look at the following example to understand the concept a little better:
You have 2 credit cards (500$ each) with a total credit amount of 1000$. To keep a credit utilization rate of 35% or less, you will have to use less than 350$ at once, before paying off the balance.
7. Show Stability To Your Creditors
Creditors absolutely LOVE stability.
Your goal as a borrower is to show that you are a good borrower.
Do your best to pay your bills on time, borrow and pay back what you owe, etc.
8. Diversify Your Credit
Another technique that is used to improve credit score is to diversify the credit that you have. Basically, you need to have more than one item on your credit history, whether it be a credit card, a car loan, a mortgage, a credit line, etc.
Not Enough?
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