How To Improve Your Credit Score

1) Get your new credit cards and use them wisely. You will probably receive credit card solicitations after you file bankruptcy. Most of my clients get numerous solicitations for new credit cards after they get their bankruptcy discharge. My clients often believe that they will get no credit after bankruptcy and many also tell me that they will never use credit again. I believe that this is unwise. You need to have credit and you need to use credit to establish or re-build your credit score. I advise clients to take the credit card companies up on a few of their offers for new cards. If you can get an unsecured card then so much the better but if you have to put up money to get a secured card it's still worth it to re-establish your credit. You should use the cards to charge things you would pay for with cash or check anyway. I recommend you use one card for gasoline and one for groceries. Charge these items on your new credit cards each month and then send the credit card companies the full balance at the end of the month instead of paying the grocery store and gas station directly.

These steps will increase your score a small amount each month but the effects are cumulative over the next 1 to 3 years. 2) Use your reaffirmed debts and other installment loans to build your credit score. All payments for secured and unsecured debts help build you score. If you reaffirmed a car in the bankruptcy then making those payments will help build your score. If you buy a new car and finance it then it will have the same effect.
Any monthly payments you make on any property financed after bankruptcy will build your score. At first the interest rates will be high but you can refinance and lower them over time as you build your score. Every month you make a payment on these loans you can build your score slightly.

3) Check your credit for free on annualcreditreport.com. This is the website set up by the credit card companies where you can get your credit report for free. You can get one report from each agency each year. Since there are three agencies you can get a free credit report every four months.
Make sure everything on your credit report is being accurately reported. Check your credit regularly to make sure that the debts you discharged in bankruptcy appear on your credit as "discharged in bankruptcy". They need to appear this way so they don't continue to drag down your score.
If your former debts are not being reported correctly then notify the credit reporting agencies. They are Experian, Equifax, and Transunion and the each have a ".com" web address. You can notify them by phone, mail or e-mail to challenge any inaccurate entry on your report.

4) Pay your payments on time. This one is very important. Nothing seems to be as important to these credit reporting agencies as making payments on time. For the fastest and highest possible score I recommend you never have a late payment on anything you finance ever again.
In fact I recommend sending in the payment early. They might give you an extra brownie point for this, who knows.

5) Keep balances low on credit cards. Don't go over 30% of your credit limit. This is a general rule. Some used to say keep the balances under 50% but now I'm hearing the 30% number more often. As far as I know there is no negative hit your credit score gets if you pay the full balance every month.
So go ahead and pay it all off each month and don't carry a balance. You'll save on interest.

6) Use you non-dischargeable debts to build your score. Do you have a student loan that is surviving the bankruptcy? Many of my clients do. If you pay your monthly student loan payments on time then those timely payments will continue to build your score. Use those non-dischargeable to help you build your score and pay on time.

7) Be disciplined. Rebuilding your score requires some discipline. Don't go out partying and charging on your cards. Don't go to stores and buy a bunch of stuff you can't afford. Don't go on an expensive vacation and run up your new cards. Be disciplined and use your new cards to build your new score. Use them to build your new life where you can get credit at a low rate to buy something important like, eventually, a house you can live in. Discipline and dedication will get you there. This is not rocket science and many have done this before you but it does require discipline. So go forward after bankruptcy and build your new life.

Please call if I can be of any help.


Douglas G. Farquhar, Esq.
1901 First Ave. Suite 217H
San Diego, CA. 92101
(619) 702-5015
E-mail: click here