Ways to Improve Your Credit Score

Once you've filed for bankruptcy, how do you make the most of it? One thing that you may not realize is that your credit score may have actually improved after you filed.

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 more proof that bankruptcy does not hurt your credit score. 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. If there is an error, notify the credit bureau in writing as soon as possible.

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. Call and ask for a higher limit once you've had the card and repeatedly paid it off for a few months. This should be done only if you really need to, and will be able to pay it off each month. It can actually be negative to have too much unused credit. 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. Create a monthly budget, 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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James Brown is a personal bankruptcy attorney in St. Louis, Missouri. He has filed over 30,000 bankruptcy cases and published many books and articles. You can request his free Missouri and Illinois bankruptcy guide at http://www.castlelaw.net for the best tips on how to prepare for your bankruptcy and find a great bankruptcy attorney.