Smart steps to repair credit after bankruptcy

Are you are buried deep in debt and struggling to pay your bills? If so, you might get debt relief even without filing bankruptcy. However, if you have already filed bankruptcy and want to know how to rebuild your credit, the following tips might help you with it:

Open new lines of credit

There are companies who claim that they can wipe a bankruptcy from your credit report. Do not be fooled by such companies, since you are not legally entitled to erase the bankruptcy from your credit record. The credit bureaus, however, give more importance to your current activities than to things that happened in the past. So, if you straight away start using credit responsibly, you will be heading towards a clean credit report. If you obtain new lines of credit, you can easily improve your score much before the bankruptcy is erased from your credit report in ten years.

Keep your cards active

Open new credit cards and keep them active by using them in place of cash. But be careful to pay them off in full after each use. For example, if you buy an item and have cash to pay the $20 bill, charge the camera to your credit card. After you return home, make an electronic payment in the amount of $20. The key point is to keep the cards active, but to keep the balance as minimum as possible.

Pay it off quickly and with cash

When you are buying something new, like a computer, a camera or household furniture, ask if you can buy it on installment loan. Pay the loan quickly and with cash.

Get your accounts settled on time

Whenever you receive any bill, pay it off immediately and before the due date. Remember, after bankruptcy, you are considered a highly risky borrower by the credit scoring models. Any indication of your getting back into the old routine may not prove well for your credit score. You must pay the entire due amount and that too on time.

Do not close the old accounts

Merely closing your previous bad accounts will not wipe them from your credit report. On the contrary, having old accounts can heighten your average account age. This might have a positive effect on your credit rating and help you repair your credit report.