Everyone goes through different trials and tribulations in a lifetime. There are some people who have to file bankruptcy because they have no other choice. If you are going to file bankruptcy, here are some tips that may be helpful in improving your credit score.
Keep Items Out of Bankruptcy
First of all, if there is anything that you can keep out of your bankruptcy it will be extremely helpful. This means, if you have a mortgage loan and you can keep the payments up and keep the house, it is extremely pertinent that you do so. Also, if you have an automobile loan and you can keep making the payments, keep the vehicle.
Open a New Credit Card
A couple of months after you have filed the bankruptcy, and it has been discharged from the courts, try to apply for a small credit card. You are most likely going to have a high interest rate, but it will be worth it to re-establish your credit.
First try at some of your local retailers like Menard's or Sears. If that won't work, it may be necessary to apply online for a credit card that requires you to pay an annual fee or even a credit card that requires you to have a savings account balance higher than you credit limit. Either way, it will be worth it in the long run for you to improve your credit rating.
Use Your New Card
After you receive your credit card, start charging on it right away. Do not charge anything that you do not have the ability to pay off in full. As a matter of fact, you will still re-establish your credit, even if you pay off the balance in full every month. With just the ability to show that you are responsible to charge on an account and make a payment, you are showing that you are capable of the credit. This, in turn, will increase your credit score.
Have Open Credit
Credit availability in comparison to debt, also increases your credit score. In other words, any credit that you have available to you, but you are not using will help your score significantly. If it is possible for you to get a line of credit on your home or automobile, the open line will increase your score quickly, especially if you do not charge to it.
The same effect will work with credit cards and any other revolving credit that you may be able to establish. But keep in mind, the more your credit bureau is pulled, the lower your score may go. So try to have someone pre-approve you before you actually submit that application.