Many people are discouraged from filing for bankruptcy because of how much it tanks their credit score. However, there are plenty of easy and reliable ways to build up your score. Bankruptcy protection is one of the few rights Americans have to give them a fresh start at a secure financial future. Even after bankruptcy, it’s possible to boost your credit score. In this article, we’ll list down 8 tips that will eventually get you a good credit score.
If you have any questions about your credit score after bankruptcies, you can talk to our experienced Monroe attorneys. Call us now!
Micropayments are small transactions, usually online, costing less than 75 cents (even as low as a fraction of a cent). Make multiple micropayments throughout the month to boost your credit utilization, which will improve your credit score.
Credit utilization is another key factor in credit scores. It measures how much of the available credit you’re using. Keep your utilization low instead of leaving your payments to build up at the end of the month. Check your credit utilization whenever you can.
Pay your Bills
Payment history is one of the most important factors that affect credit scoring. If you forget to pay off your bills or pay them late, this stays on your credit report for seven years, leading to poor credit.
Plan out your monthly payments and budget accordingly. If you forget to pay bills by at least 30 days, call your creditor ASAP. Ask if they will consider not reporting your late payments to the three credit bureaus and arrange for whatever payment you can. If they won’t, it’s still worth getting your accounts paid off to boost your score.
Check your Report for Errors
It’s not uncommon for errors in credit reporting, which may negatively impact your score. Fix this inaccurate information as soon as you spot them to raise your credit score.
You’re entitled to a free credit report weekly from the three major credit bureaus: Experian, TransUnion, and Equifax. Check them regularly for any mistakes, like payments missed or negative information left up there that shouldn’t be. Dispute these mistakes immediately to get them removed ASAP.
Consult with our Monroe bankruptcy specialists to talk about what you should expect for your credit reports after a bankruptcy.
Get Different Types of Credit
Mix up the credit that you have. If you only have loans or only credit cards, consider getting another type of credit to improve your score. Having both revolving credit and installment accounts boosts your perceived creditworthiness.
Get a Secured Credit Card
Although it’s difficult to qualify for new credit after bankruptcy, it’s one of the best ways to raise your score. A secured credit card is a type of credit card with a cash deposit serving as collateral, with the amount being the same as your credit limit. Using a secured card can build credit. Pick from credit card companies that report your payment activity to the credit bureaus to rebuild your credit.
Get Higher Credit Limit
Ask your card issuer to increase your credit limit. If this happens and your balance is the same, this lowers your credit utilization, building your credit score. You’ve got a chance of increasing your limit if you have a positive payment history or your income has increased. Some issuers may be more favorable to your request during these pandemic times.
Keep credit cards open
If you close any credit cards, you’ll be lowering your credit score. When you close a credit card, you lose that card’s credit limit, which lowers your credit utilization. Keep the card open and use it every once in a while so that the credit card issuer won’t close it.
Consider becoming an authorized user
You may have a close friend or a family member who uses their credit card responsibly and has an excellent credit history. Try asking them if they can add you to their accounts as an authorized user. You don’t have to use the card, but since it is connected to an account that has positive payment habits, it will lead to a better credit score for you.
The road from a bad credit score to an excellent credit score is not easy. It takes much work to manage your budget and your expenses. Watch whenever you’re borrowing, repay whatever amount you owe each month, and keep your utilization low.
Don’t let a fear of a bad credit score prevent you from filing bankruptcy and securing your financial future. To get started on the process of taking your life back, speak with a Northeast Louisiana bankruptcy attorney at E. Orum Young today.