How to Improve Your Credit after a Bankruptcy

After a bankruptcy it is Important to be proactive about restoring your credit score. These are some ways to take an active role in increasing your financial situation after a bankruptcy:

Find your credit score — Many people do not do this, because it can be scary. Get a copy of your credit report and find your score. Review it for any inaccuracies and make note of your debts. Only then can you come up with a plan to pay off your debts and improve your credit. CreditKarma.com is a great resource to get your score truly for free.
Open a new bank account — Opening a new checking and savings account will demonstrate financial stability. It can also give you a fresh slate to practice good financial habits. When you open your account, talk to the banker about signing up for automatic online bill pay. This will ensure that your bills are paid on time, which is a major factor in good credit.
Apply for a secured credit card — If big credit card bills led to your bankruptcy, you may feel like this is a terrible idea. Why go down that path again? The best answer is that secured credit cards are one of the easiest ways to build credit and improve credit scores. Compare interest rates of different cards, so you can select a card with the best rate and a low annual fee. A rate around 15% is good and an annual fee less than $30 is desirable.
Get a gas card or a retail card — Gas and retail credit cards will also improve your credit. If you drive a car, you will have to purchase gas. You should make those purchases work for you. Gas and retail cards typically don’t require applicants to have good credit and, in fact, cater to folks with blemished credit.
Pay off your balance in full every month — While you are reestablishing your credit, it’s critical to pay off your full balance every month. This demonstrates to creditors that you are not a risk. Timely payments also have a significant impact on your credit score.
Continue to monitor your credit score — Check your credit score regularly (monthly is ideal) while you are actively improving your credit. Watching that number go up can make you feel like your hard work is really paying off.

Finally, it’s also important to remember to be patient throughout this process. A bankruptcy can impact your credit for as long as 10 years. But the more active a role you take and the sooner you get started, the quicker you can bounce back from bankruptcy.