Credit cards are becoming an essential part of every individual's life since they are continually running
out of cash to meet household expenses and daily necessities. But when the credit card bills become
unmanageable and dreadful, people incessantly fall into credit card debt. In such circumstances, debt
stricken individuals either turn to a credit card consolidation or bankruptcy in order to come out of debt
fast. Although both are viable ways to eliminate the debt, bankruptcy is considered to be a last resort
as it ruins the credit report relatively more. However, fortunately, on the contrary to many people's belief,
rebuilding credit is possible after bankruptcy.
So let us here take a look at how to refurbish your credit score after bankruptcy.
1. Establish payment history:
This is one of the best ways to improve your credit score after bankruptcy. Pay your bills on time and
establish a good payment history. Lenders typically want to see whether you have learned a lesson after
filing for bankruptcy. So make payments on time and improve your credit score.
2. Take a look at your credit report:
After bankruptcy is complete, obtain your credit report from credit report bureau and see if your
discharged debts have been reported correctly. Review the report scrupulously and check if there is any
error on the report. If there is, dispute the errors with the bureau and ask to remove them immediately.
3. Obtain a new credit card:
Obtain a new credit card as this will help you improve your credit score. You may not qualify for an
unsecured card, but can surely get a secured card. Secured credit card is a card that offers a cash
deposit equal to the amount of credit. So whatever credit you get will have a low limit, which you can
use anyway. Make all payments on time and start building your credit score.
4. Pay your bills in full each month:
Once you get a card, make sure you pay your bills in full each month. Paying bills in full will be
reported on your credit report, which in turn will boost up your credit rating. It will also lead you
to a faster credit increase.
5. Don't close your accounts:
Do not close the accounts that have already been paid. Closing the accounts will damage your credit
score instead of doing any favor. First, it will abridge your credit history and second, it will erase
positive items from the report.
6. Build cordial relation with lenders:
Building cordial relation with lenders sometimes help you get a new credit. So get in touch with your
creditors, explain them why you have filed for bankruptcy, and how you plan to change your habits. Doing
this can increase the chances of getting a new credit and rebuilding the credit score faster.
7. Keep a constant check on your credit report:
Keep a check on your credit report to determine if your new positive habits are showing any change on
the credit report. Aside from this, you can also see how your habits are serving you rebuild the
8. Create a budget plan:
Making a budget is an important part of improving your credit score after bankruptcy. Before acquiring
a loan or obtaining a credit card, ensure whether you will be able to make monthly payments. Make a
monthly budget plan, including all your income and expenses, and determine if you have anything left to
make payments after meeting daily expenses.
Thus, in conclusion, considering the above mentioned tips one can rebuild the credit score