3 Tips on How to Rebuild Credit After Bankruptcy
If you are looking to rebuild your credit after bankruptcy, then this article is for you. Read on to learn how to rebuild your credit after declaring bankruptcy.
1. Get a Secured Credit Card to Rebuild Credit
You can use a secured credit card to rebuild credit after bankruptcy. A secured credit card requires you to make a deposit against the card’s credit limit. Your credit card limit will be a percentage of your security deposit, or the exact deposit amount.
A secured credit card works just like a standard credit card. When you make a purchase using the card, you will have to pay the balance owed. This is perfect because you have the cash needed (the deposit) to pay the balance off.
So how does a secured credit card help you rebuild credit? Secured credit card lenders generally report your credit activity to the three main credit bureaus Therefore, making payments on time will help you rebuild credit after bankruptcy.
Note, some companies will charge you penalties and interest if you fail to make a payment, or charge over-the-limit on a transaction. Late payments will also be reported to the credit bureaus.
2. Use Store Credit Cards (Wisely)
Open a store credit card in a place that you typically pay for purchases in cash. Start charging these purchases to your store charge card. After each purchase, immediately pay the balance owed on the card. Most stores allow you to pay at the register on your account, or at customer service. Do not leave the store without paying the balance owed.
This is a great way to rebuild credit after bankruptcy. You do not have to worry about keeping a balance on a credit card, or missing a payment.
3. Pay Your Bills On Time
It should go without saying, but you must continue to pay your bills on time. There are new credit reporting agencies that include non-traditional bill payments into your credit history. For instance, Payment Reporting Builds Credit (PRBC) is a new credit-reporting agency that allows you to build credit through evidence of paying routine monthly bills on time.
For more information on how to rebuild credit after bankruptcy, connect with a San Diego bankruptcy attorney.