Helpful Tips To Help Rebuild Your Credit After Bankruptcy
After you declare bankruptcy and finish all the tasks with your bankruptcy attorney in Las Vegas, it's a time to rebuild many aspects of your life. One important area is to improve your credit score, which will take a significant hit after bankruptcy. Here are some ways to improve your score over time.
Find Your Starting Point
Begin by requesting your credit report from the three major credit companies: Equifax, Experian, and TransUnion. They will provide one free copy per year, and you should review them carefully to make sure there are no errors. You will also have your current score and can see when it improves and how quickly.
Pay Bills Quickly
The easiest way to improve your credit score is to pay your bills on time. This action contributes to 35 percent of your score. Create a system that ensures you can build this good habit, either manually or electronically, and stick to it.
Get a Credit Card and Don't Carry a Balance
If you have the self-discipline to carry plastic, using a credit card and paying the bill in full every month is a good way to improve your score. You can choose a card that has extra benefits like frequent flyer miles, cash back, or discounts on fuel. Just make sure you pay off the balance in full and avoid racking up high-interest payments.
Take Out a Small Loan and Pay It Off
Once a year or two has passed after working with a bankruptcy attorney in Las Vegas, consider taking out a small car loan and paying it off. Every time you demonstrate that you can borrow money and repay it successfully, you will improve your score.
Avoid Credit Repair Services and Closing Accounts
Two things to avoid in a post-bankruptcy situation are credit repair services and closing credit card accounts.
First, many businesses may offer you assistance to fix your credit, but in most cases, these services come with high fees. It's a smarter idea to work on this effort on your own or with the help of a reliable friend or family member.
Second, do not close out your credit cards. If you are too tempted to overspend, simply cut up the card and don't carry it with you, but keep the lines open.
Remember that the most important thing is that rebuilding credit takes years of good financial behavior. You will need to prove over time that you have changed from the bad habits that lead you into bankruptcy into good habits that make you a worthy recipient of larger credit lines. The easiest ways to do that are to pay off bills on time and borrow small amounts of money and pay them back on time.