Three steps in rebuilding your credit after bankruptcy

It goes without saying that the economy has been tough for the past four years. As a result of these economic difficulties, more South Carolinians and Americans in general have been through a bankruptcy. However, once the bankruptcy is completed, many do not know what to do to rebuild their credit.

It is important to return to financial heath after bankruptcy. Once a bankruptcy is filed, it stays on your credit report for up to 10 years, which can lower your credit score dramatically. Since lenders use your credit score when considering whether to approve you for a loan, mortgage or credit card, a low credit score can disqualify you from all loans except the ones carrying the highest rates of interest. Fortunately, if you take some simple steps after your bankruptcy, you can rebuild you credit score.

Make timely payments.

As up to 35 percent of your credit score is based on your payment history, one of the easiest ways to increase your credit score is to make sure that your bills are paid on time. Additionally, making consistent bill payments will improve your qualification changes for a loan or mortgage, as lenders typically want evidence of 12 months of consistent on-time payments.

Check your credit report

Your credit score is derived from the information contained on your credit score. It is therefore important to review your credit report to ensure that there are no errors that could hurt your score. To do this, you can order one free credit report from the three major credit reporting bureaus per year at AnnualCreditReport.com

A credit card may help

If used responsibly, a credit card can help improve your score by showing potential lenders that you can use credit wisely. If you can’t qualify for an unsecured card, consider getting a secured credit card. This type of credit card gives you a credit limit equal to the amount of money that you deposit into an account.

It is important to check with the credit card issuers to ensure that they report your payment history to the three major credit reporting bureaus. If the issuer does not, your responsible payment history will not help your credit score.

Get legal advice

If you are considering bankruptcy, it can seem like the bankruptcy will ruin your good credit forever. However, this is not true in the majority of cases. It is important to seek the advice of an experienced bankruptcy attorney who can advise you on how bankruptcy will affect your individual situation.