Ways To Improve Your Credit Score After Bankruptcy

As you will well be aware, when you become bankrupt you end up with serious credit problems.  Some people think that being bankrupt is the end when it comes to credit ratings but it doesn’t have to be this way.  There are a number of different tips and tricks that people who are bankrupt can use to re-build their credit rating.  Prior to undertaking this, you will need to read up a bit on the topic of the FICO score because if you are clueless on the subject then it might end up being unnecessarily costly for you.  When you have a clear idea of credit ratings then it’s time to move onto the practical stuff.

How Bankruptcy Affects Your Credit Score.

For those contemplating bankruptcy,  your credit score is likely to be in a very sorry state indeed.  But please note that there is a large chunk of your credit record that is removed when you become bankrupt.  This means that things like late payments are deleted.  So it’s a sort of “swings and roundabouts” situation.  Your credit report is made worse by the bankruptcy but the deletion of many items will make it better.  So overall, it’s unlikely to have a massive impact.

FICO Category For Bankruptcy

When you become a bankrupt, you will find that you are placed in a special category that FICO has set up.  Basically your previous financial history won’t be taken into account for the calculation of your credit score.  So basically the slate is wiped clean and you can start afresh.

Keep An Eye On Your Credit Report

The monitoring of your credit report is very important and shouldn’t be overlooked when trying to rebuild your credit rating.  There are 3 different credit agencies that you can contact for a copy of your report.  You can do this every year.  So when you look at your report and see any errors you can simply contact the companies involved to inform them of the error.  It might be that they have mixed your details up with someone who has the same name as yourself and therefore loan applications and the likes will show up when they shouldn’t have.

Pay On Time

You really need to make a concerted effort to pay all of your bills prompty so that you don’t get any black marks against your credit score.  It doesn’t matter whether the bill is small or large you need to devise a way of ensuring that they are paid.  Sometimes paying late is something you can’t avoid, so if you think that this is likely make sure you talk to the company to ask for some extra time or to make a part-payment.

There are some credit cards that can be taken out by people who have bad credit.  Talk to your bank about whether you are likely to be approved.  If you are then take it out and every month make a small purchase with it.  It might only be $20 but the important thing is that you pay it off.  If you do this every month it will look good.