Don’t think of bankruptcy as the end of your “financial trustworthiness”. Even if you have filed for protection from your creditors and reached some form of agreement regarding your debts there are still some things you can do to save and even improve your credit rating.
Just remember that this is something you have to take seriously. A bankruptcy can remain reflected in your credit report for up to 10 years and your credit score will stay low until you have started building up your credit again.
So what should you do?
Do not close your accounts
Yes, it was your account that led to temptation and spending in the first place, but it would be a bad idea to throw the baby out with the bathwater, if you get the drift. Closing your accounts will only raise red flags with the company and make them think that you are no longer interested in settling your obligations or even that you’re preparing to make a run for it. Closing accounts will also reduce the amount of credit you have available to you.
Apply for a secured credit card
Get a card that will allow you to put as high a deposit as possible. You might think this is a bad idea, but if you have such a card the disposable balance the credit card will report to the credit bureaus will be equal your deposit and that will do good for your score. Just remember to buy little with that card at first, never get carried away. It also helps to pay off the small balance each month. Paying this will eventually get rid of the initial credit increase.
Pay your bills on time
Your payment history makes up roughly 35 percent of your credit score so one of the best ways to get your score up again is to make sure you always your bills on time. If it was bad memory that made you always late for payments, take drastic measures to make sure you know when the due date is. Go as far as to mark due dates on your calendar or PDA. You can also set up alerts with any handheld mobile device you always have with you. Many banks and creditors also offer services that allow you to set up your payments electronically, take advantage of this feature.
Constantly monitor your credit report
You can request yearly copies of your credit report, but better if you go over them every six months. Check the report and make sure all items that have been discharged in the bankruptcy are no longer there. Also keep any eye out for mistakes or inconsistencies.
If you see something that has to be disputed you should do this over certified mail as opposed to phone call, email or the company’s online service. Letters have to be encoded manually by a processor and this may help guarantee that your case gets to where it should.
Get a loan
Try not to do this until after a year or two after the bankruptcy. Whether it’s for a car, a house, education or anything else, also be sure that it is affordable so you can pay it off. Keep a lookout for loans with the lowest interest rates. Remember that once your credit score improves, any loan you get in the future may likely have a lower interest rate.