Home Finance 6 Step Guide on How to Rebuild Credit After Bankruptcy

Dealing with bankruptcy is not easy, especially when you have no knowledge of what to do next. Getting some helpful info on how to rebuild credit after bankruptcy can actually act as a lifesaver. With the correct methods, you can step out of the insolvency soon enough than you’d think.

1. Checking Your Credit Report.

First off, you must know your financial status. You can refer to your credit report to find out exactly where you have to work and to what extent. Are you having multiple missed or late installments or your debt usage is excessively high? All these hints can help you make sense of what things to handle first. You are qualified for a free report from every one of the credit reporting agencies once a year. Your credit report will give you a sense of what’s going on.

2. Catch Up on Your Payments.

Installment history is the biggest factor that affects your credit score. In case you are lagging behind your installments due dates, you won’t be able to enhance your credit status. So try to pay the majority of your accounts as top priority. In case you can’t stand to convey everything without a moment’s delay, you can contact your banks and work out an installment plan.

Be in advance when you contact your creditors, clarifying your situation and telling them you need to pay your debt on time. Given you have lesser sources of credit after bankruptcy, it’s smarter to tell your banks the amount you can pay, and to what extent you hope to pay it. As a rule, it’s possible to work out a course of action that all parties can live with.

3. Pay Your Bills on Time.

Going ahead, pay your bills on time. This means your non-credit bills too. Your missed utility installments and late lease payments can be accounted for to the credit authorities. Since installment history is so vital, setting up a solid example is crucial to modifying your credit. At any rate, you need to stay away from reports that you are missing installments, or paying constantly late. Consider setting up automated withdrawals to abstain from missing installments later on and to improve your credit after bankruptcy.

4. Do Not Close Credit Card Accounts.

When you are looking for help on how to rebuild credit after bankruptcy, abstain from shutting Visa accounts. The longer an account as a consumer remains, the better the credit score becomes. Nonetheless, when you are extremely a long way behind your installments, you might not have other choice left. A payment plan may expect you to drop your Visa. However, if possible, keep your older accounts active given you have a favorable account record on your side.

5. Pay Down Debt.

Another crucial factor in your FICO score and credit report is your credit usage ratio. Your credit usage is a ratio of how much debt you have. It is communicated as a segment of the accessible credit you are using. When you have an aggregate credit accessibility of $20,000, and you are utilizing $17,500 of it, your credit usage is 75%.

6. Get a Secured Credit Card.

A standout amongst other approaches to assemble an installment history is to use a credit card. A secured credit card can help with this progression if your poor credit blocks you from meeting all requirements for a “normal” Mastercard. A secured credit card necessitates you keep cash in a linked bank account as guarantee.

Since the cash is as of now there, it is simpler to get endorsement for a secured card, particularly when you have poor credit or suffering from bankruptcy. In either case, your installments are accounted for to the departments consistently, so it has a major effect in demonstrating that you pay frequently, and on time.

So these are six helpful tips on how to rebuild credit after bankruptcy on your own. Or you can take help from a pro like Reliant Credit Repair for satisfactory results.