5 Ways to Repair Your Credit Score After Bankruptcy

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I have always been scared of debt. Growing up money was always really tight, and definitely wasn't spent on frivolous things. One time I overheard a conversation about bankruptcy and how it is like a double-edged sword. If you use it in the right way, the financial tide can turn in your favor, one wrong move and the wave will engulf you and damage your credit score. When it comes to bankruptcy you need to be very careful. For instance, a chapter 7 bankruptcy will take ten years to remove from your credit report, while a chapter 13 bankruptcy takes seven years to remove from your credit report. If you are self-employed and looking for some help with your debt why not look for a self employed loan?

Today, I will be sharing with you 5 ways to repair your credit score after bankruptcy. These are just suggestions and not guaranteed. You should always talk to a professional before making financial decisions.

1. Change your financial habits
Rebuilding your damaged credit will require some serious persistence. Without healthy financial habits, you will never be able to rebuild your credit score. Practice paying bills on time, not keeping any debt overdue, start paying with cash, etc. Just like bankruptcy delinquencies or missed payments will stay on your credit report for seven years. Your newfound financial habits should make sure that everything is getting paid off as it comes in. If you can't afford something, should you have really bought it in the first place?

2. Create a budget
Maintaining budgeting skills will be extremely important, especially during the next seven to ten years. Not paying your debt on time, only paying the minimum due, you're just hurting yourself. Your credit report will register more debt and will be even further from you recovering. Don't spend more money than you earn and you will not need to borrow money. I personally only use credit for purchasing gas, otherwise, I always try to use cash. This includes going to the grocery store if I know I only have X amount of cash for the week I buy fewer things that I do not need.

3. Do not close accounts
Keep your credit accounts open, even after the card expires. Closing an account marks a decrease in your credit limit, which ultimately reduces your credit score. To help increase your credit score, you need active accounts. You do not need to use them, they just need to be active.

4. Use your credit cards wisely
Use your credit card but not too much. Keep in mind, you are using the credit card to repair your damaged credit. So, you will want to use it when cash is not available. Or in my case I only specifically use it at the gas station - I never know how much money I am going to spend on gas so I had to go in, giving some money and then having to go back in and give more because it didn't fill my tank enough or getting a refund. It's just easier for me personally to use a charge card, plus it keeps my credit up.

5. Pay down your debts
As you use your credit card, debt is registered. Pay that debt as soon as possible. Do not let the interest accumulate. If you're buying things that means you should have the money for it, therefore it is best to pay your credit card the day after you get the billing statement. Why you might ask? 35 percent of your credit score is your payment history and timely payment of your debts will actually boost your credit score.



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