Steps to improve credit score after bankruptcy
Repairing credit score after bankruptcy is difficult but not utterly impossible. Once the word BK gets an entry into your credit report, it stays there for long. And as long as it stays, you might face difficulty in improving your credit rating. However, over the time the severity of the impact of bankruptcy gets reduced or gets milder. With regular payments, your score again shows positive signs. Read on to know the basic steps of credit repair and bring your credit back in a good shape.
1) Taking a new secured credit is a good idea towards achieving your goal. A secured credit is taken by putting some portion of your asset against your credit. The value of the deposit is equated by the amount of credit taken. The amount of your deposit determines your credit limit. You will get your deposit returned after you are able to build long term relation with your creditors. Thus creating a good payment history will help you to improve your credit score.
2) You can apply for a store card. It is relatively easy to obtain a store card than a credit card. It will be worthwhile to use and keep it for one or two years. However, if you do not get approved for a store card, probably you will not be eligible to obtain a credit card after bankruptcy.
3) You can also take up a car loan. A good credit report requires you to have myriad types of debt accounts. It is comparatively easier to take up installment credit than revolving credit. The FICO credit scoring model would count your regular payment pattern in installment credit. A small personal loan can be an alternative if you do not get car loan after bankruptcy.
4) In the fourth step, you will need to apply for credit card. Once you are getting afloat with your regular bill payments, you will be able to improve your score.
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