5 Ways to Improve Your Credit Score

5 Ways to Improve Your Credit Score

5 Ways to Improve Your Credit Score

What can you do to make the most of your situation after you've filed for bankruptcy? Some people don't know it, but your score might have improved after you filed your bankruptcy case.It may be hard to believe given the nature of bankruptcy, but most of our clients actually see their credit score improve after filing bankruptcy. This is just further proof that bankruptcy doesn't hurt your credit. It's important that you don't confuse having a bankruptcy on your credit report with its effect on your credit score. While bankruptcy counts as a negative mark, the debt that is eliminated from filing outweighs the negative effects of bankruptcy on your score. That debt that was weighing you down before is no longer a negative factor on your scoring. Good news! Right? And it's not like there's going to be a scarlet "B" on your chest. In a difficult time you chose the most responsible way to protect your family. Now you've put yourself back on the road to good credit, but how do you stay on it? These are some quick tips that will help increase your credit score, and keep it up. 1) Know what your score is Your credit score is a fickle beast, it changes from month to month. Every year you are entitled to a free report from each of the three major credit bureaus. Do not fall for a scam service that will charge you a fee for all three reports. Make sure that when you receive it everything on your report is correct. You want to make sure that any debt that was included in your bankruptcy is noted on the report. Notify the credit bureau in writing as soon as possible if there is an error. 2) Get a credit card, pay it off every month, repeat. It will help you to reestablish credit if you have and pay off your credit card. The best way to do this is to spend on it carefully. Make sure not to charge more on it than you can pay off at the end of the month. This is important because you may be limited to higher interest cards. Even if your limit is low repeatedly paying off the entire balance on a card will help improve your score. 3) Work your way to a higher limit You have a credit card you can pay off every month, great. But how close do you get to reaching its limit? Ideally you only want to spend about 1/3 of your credit card's limit each month. Once you've had the card and repeatedly paid it off for a few months, call and ask for a higher limit. This should be done only if you really need to, and will be able to pay it off each month. Having too much unused credit can actually be negative. Try to stay around 50% of your credit limit for that card. 4) Pay your bills on time Just like when you pay your credit card every month, paying your bills helps build credit as well. Look into setting up automatic payments through your bank and then double checking to make sure they go through. 5) Check your habits If you filed bankruptcy in the first place due in part to questionable habits, now is the time to change that. Make a budget every month, and stick to it! Getting out of debt is difficult, but the decision to file for bankruptcy is the first step in the right direction. If you find yourself struggling with debt be sure to contact an experienced bankruptcy lawyer for a free consultation to see what your best options are. It never hurts to ask.

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