Today’s post is contributed by Phil Bradford

It is a well-known fact that bankruptcy pushes your credit score in the danger zone. In spite of this, many people file bankruptcy to get their finances back on track. It’s true that bankruptcy helps you to come out of the financial mess. But, you can’t also ignore the fact that it gives a severe blow to your credit score.

Apart from bothering your credit score, bankruptcy also stays on your credit report for a certain period of time. You’ll find a Chapter 7 bankruptcy for 10 years on your credit report. Whereas, a Chapter 13 bankruptcy stays on your report for 7 years. Don’t get intimidated by the thought of filing bankruptcy. You have ample options on your side to repair your own credit after bankruptcy.

Bankruptcy is not the end of your financial life. It’s just the beginning. After filing for bankruptcy, you still have several alternatives left to revive your credit score. So, let’s explore some of those options by which you can rebuild your FICO score:

#1 Try to pick up credit

A credit card is the easiest available option to rebuild your credit score after bankruptcy. If you can’t handle your credit card skillfully, then don’t apply for one. Did you file bankruptcy due to huge medical bills? Yes? Then apply for a credit card as soon as possible. It’ll cure your injured credit score.

Right now, you won’t get approval for a regular credit card. You know why? Because your credit score got badly damaged due to bankruptcy. Don’t worry! You still have the option to get a credit card. Yes! You can apply for a secured credit card. Make sure your secured credit card activity is disclosed to the credit bureaus.

Ask your close friend or family member to count your name on his or her card as an authorized user. Also, be sure that your activities as an authorized user are reported. You can get an unsecured credit card or a loan once your credit score comes back in good shape.

#2 Use less of your available credit

It is good that you have opened a credit card account. But remember, the lower your credit utilization, the better will be your credit score. Your debt balance should be 20% or less than your credit limit. Even if you have the capability to pay off the full balance each month, then also you should keep your credit utilization low.

#3 Refrain from closing credit accounts

Are you committing the mistake of closing good old accounts of yours? If yes, then beware! It may injure your credit score even badly because closing credit accounts curtail the amount of your available credit. It’s intelligent if you keep your old credit accounts open. It’ll cure your damaged credit score.

#4 Keep an eye on the credit repair services

Are you getting any credit repair offers? If so, then you should be cautious since many credit repair services charge high fees. Before you go for any of these services, carefully investigate the whole matter. Make an attempt to look for any loopholes. As compared to the credit repair services, you have the option to fix your credit score on your own. If you want to make your credit score happy once again, then DIY is the best option here.

#5 Pay your student loan

You know that student loans aren’t discharged in bankruptcy. Right? Do you have a student loan? If yes, then pay it off on time. This is the opportunity you shouldn’t miss if you want to recover your credit score. Well, you’re intelligent enough if you have already taken the advantage of a student loan to repair your FICO score.

#6 Some quick fixes

Apart from the above points, you should also consider the following options if you want to raise your credit score after bankruptcy:

Pay the monthly bills on time

Review your credit report at regular intervals

Make a budget and try to stick to it

Try not to blame yourself, it’ll only make the matter worse

Your journey to bankruptcy is not decided overnight. Similarly, your journey to a good credit score will also take time. Your credit score won’t touch the 700+ mark in a flash. First, you need to be calm and be patient. Then take steps to build your credit score again.

[Author’s bio: Phil Bradford is a web enthusiast. He shares his expertise through his crisp and well-researched articles based on money management, money saving ideas, and so on. He is also associated with many finance and law communities.]

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