So you filed bankruptcy and received your discharge order. Now, how do you rebuild your credit?

Here are 10 ways to rebuild your credit:

  1. Take out a secured credit card. Currently, Capital One and Discover both have credit cards available to help you rebuild your credit. Charging your card every month and then paying off the balance will show creditors you know how to manage credit. As your credit score increases, credit card companies will compete for your business and offer better and better deals.
  2. Take out an unsecured credit card. Like a secured card, using and paying off an unsecured line of credit will show creditors you can manage your credit. This will help you rebuild your credit.
  3. Take out an auto loan. If you completed a reaffirmation agreement during your bankruptcy, and it was Court approved, then staying current on those payments should help you rebuild your credit. Additionally, any post-petition auto loan you take out will help you rebuild your credit as long as you make your payments on time. Timely payments will help you rebuild your credit.
  4. Keep your credit card balances low. Creditors look at how much credit you have available relative to how much credit you are using. A lower balance (10-15% of your available credit limit) shows creditors you can manage credit. This will help populate your credit report with good credit and is an effective way to rebuild your credit.
  5. Make arrangements to repay your student loans. Since the majority of student loans are not discharged in bankruptcy, many student lenders continue to report on your credit. However, this can be used to your advantage by making monthly payments. Once you and your lender agree on a repayment plan, payments you make are typically reported positively on your credit, which can help drive up your score and essentially help you rebuild your credit.
  6. Try to avoid opening too many new credit accounts at once. Doing so, can reduce the average age of your accounts, which can hurt your score. The length of time your credit account has been open factors into your credit score.
  7. Avoid canceling open lines of credit or credit cards. As mentioned above, part of your credit score depends on the total ratio of credit used to total available credit. Closing a credit account reduces your total available credit and thus raises the ratio, which can lower your credit score.
  8. Pay your credit cards on time. Good payment history contributes to your credit score. It is much better to pay your credit card on time than to fall behind. Staying current with your bills each month will help you establish a positive and healthy payment history. And, a good payment history helps you rebuild your credit.
  9. Get any remaining accounts out of collection. Such as debts not discharged like: student loans, speeding/parking tickets, criminal fines, and taxes. For example, if any of your student loans are in collection, be sure to rehabilitate them out of collection status. Utilize income based repayment plan to get your student loan account out of collection.
  10. Check your credit reports. Look for pre-petition credit card balances still showing up on your credit report. If any show up then send a dispute letter to the credit-reporting agencies (i.e. Equifax, Experian, Transunion). This should help remove a reported debt that should not be there. Getting that removed will help you rebuild your credit. You can run your credit reports free at annualcreditreport. com.

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