Finance Credit

Ways To Increase The Credit Ratings After Bankruptcy

Published at 07/14/2011 13:47:41

Filing bankruptcy has a negative impact on your credit rating as you will not be able to do a lot of things. You will not be able to buy things on credit or opening charge accounts. It also means paying more for loans because of the high interest rates that you will be charged. There are many things you can do however to improve on your credit score within a reasonable short period of time. Below are some of the things you can consider doing in order to increase your credit ratings;

Pay all your bills earlier or on time

This could be your car loan that you were allowed to keep when you filed bankruptcy. It also includes your new accounts. This is one of the best ways to improve your credit score and lenders will also be willing to provide you with loans. If there are any accounts that you have not paid for a long time it is a good idea to pay them, in fact you need to pay off all your debt.

Credit report

Whilst you are in the process of repairing your credit ratings also take time to carefully look at your credit report. You want to check for any errors and mistakes that may be there. If there is any information that has been entered incorrectly then you need to inform the creditor concerned and the credit bureau as well. It usually takes up to seven days for the credit bureau to do the amendments. A credit report can be obtained for free from the big three credit bureaus every year. It is common to find wrong information on these credit reports so make sure you obtain a copy.

Open an account

In order to improve your credit rating it is a good idea to open a charge account at a furniture shop for example. Such stores will usually allow you to open an account even after a bankruptcy. Although such an account will charge you higher interest rates, it will help you to increase your credit score .

Make a big down payment

It is also advisable to make a significant down payment when buying from such shops. This will help you to pay the account within a shorter period of time and at the same time boosting your credit score. You can do that even for any loan that you qualify for.

Secured credit card

You can also get a secured credit, whereby you are required to deposit some funds into the account. After a certain period of time you can convert the account to an unsecured status.  What you only need to do is to make your payments well on time. Although the interest rates may be a bit higher , your credit score will significantly increase due to on time payments.

Tips and comments:

Never pay money to repair your credit

There are some people or companies out there who claim that they can help you repair or boost your credit score. The most effective way of fixing your credit history is taking the suggested methods above. Instead of using that money to pay such companies why not use it to pay off your debts and increase your credit score.