Declaring bankruptcy should be the last resort in dealing with a substantial amount of debt. Typically those that file either chapter 11 or chapter 13 bankruptcies already have a low credit score due to delinquent payments, charged off accounts and / or collection accounts. By filing they are giving themselves a second chance to improve their credit worthiness and make a fresh start. Increasing a credit score may seem like an impossible task but given time and due diligence can be done with a few simple steps.
The first step after declaring bankruptcy is to obtain a copy of your credit report from all three of the credit bureaus: Equifax, Experian and Trans Union. Not every creditor uses the same reporting bureau so it is important to obtain all three. Once obtained, review them to insure that all discharged debts are reported accurately.
The next and most important step to make is to insure timely payments are made on your existing debts. Depending on the type of bankruptcy you filed you may still be left with an auto loan or a mortgage payment. Considering the fact that payment history makes up the majority of your credit score this is a vital step to reestablishing a good credit record. One suggestion is to set up automatic withdrawal payments from your checking accounts. If you decide to go this route, always insure the funds are available each month so you do not incur any overdraft fees. Setting up a cash flow calendar listing paydays and also the dates the bills are due is an excellent way to keep current on all of your bills.
Step three is to reestablish a good credit record by applying for new credit. I know how that may sound considering credit card debt could have been the problem that led to filing in the first place. One wise decision would be to apply for a secured credit card. Secured credit cards require a deposit to be made which in turn becomes the line of credit available to you. For example, if you deposit $300 dollars you will be able to withdraw up to $300 dollars. Before applying for any of these cards, I recommend researching the company before hand to insure they are legitimate and not filled with numerous hidden fees. Bankrate.com is an excellent site to compare rates and read more about secured credit cards.
The most important to thing to remember after filing bankruptcy is not to make the same mistakes twice. As the saying goes, those that do not learn from history are bound to repeat it. To learn more about your credit score, visit http://www.myfico.com/ .