The fact is, after bankruptcy life changes, and if you want to restore your financial position, there are certain strategies one can use to improve one’s credit rating, but these are greatly helped by including them as part of an overall strategy prior to filing chapter 7 bankruptcy.
Tip 1. Creditor’s Accounts.
It’s important that you understand how your credit score is compiled. It is not just a single agency that gives the rating, but data that the agency receives about your credit position from your creditors. This is analysed and your score worked out.
Make sure that your bankruptcy includes all your creditor’s accounts and that the balances show zero. The next step is to contact your old creditors and ask them if they would be prepared to stop reporting your account to the credit agencies. They are not obliged to report to the agencies, and if you can persuade only one or two to cease reporting, this can have an enormous positive impact on your credit score.
Tip 2. Credit Cards.
There is something of an irony here, in that it might well have been credit cards that caused the problem, and yet they can also perform a useful role in getting your credit rating higher. A credit card after bankruptcy, if you can get one, is a means of showing that you can borrow and repay debt responsibly, which is what the credit agencies are looking for.
Tip 3. Get a Secured Card.
A secured credit card is an almost risk free way to restore your credit rating. Basically, you pay the credit limit up front, and it is held as a deposit. If you find that you cannot repay the balance you can hand the card in and clear the balance with the deposited amount, which will be cover what you owe.
That way the agencies see you repaying your debt, therefore acting responsibly, and there is no danger to you of overspending, because if you cannot repay, you can use the money held on deposit.
Just be certain that the card issuer is registered with the credit bureaux, otherwise the card will have no bearing on your credit score.
Tip 4. Become a Name on Someone Else’s Card.
Having your name put on someone’s card is not the same as using it, and indeed you don’t need to. As long as they have a good credit rating, this will reflect back on yours, without even using it! The other thing is that the other person will not be disadvantaged by your poor credit hstory.
Just keep in mind, however, that if the other person’s rating drops, this will affect you too.
For a good number people however, difficult financial events have conspired to make managing their debts impossible, and has left them considering how to claim bankruptcy. If you are in that situation and need more free advice, visit www.howtoclaimbankruptcy.net.
