Spending and Borrowing 5 Tips on Building Credit After Bankruptcy By Mary M Posted on 3 weeks ago 6 min read 0 0 18 Share on Facebook Share on Twitter Share on Google+ Share on Reddit Share on Pinterest Share on Linkedin Share on Tumblr Photo by zonseo Filing bankruptcy is a difficult process, but when you have everything finalized it feels as if a burden has been lifted off your shoulders. However, it’s tough to take the next step forward and rebuild your credit after bankruptcy. It’s important to start thinking about, especially if you want to consider major purchases later down the road, such as a car or a home or even leasing a new apartment or house. How do you start? We have five tips for you on how to rebuild credit after bankruptcy. 1) Get a secured credit card. At this point, coming out of the bankruptcy process, your score is likely very low, and probably near the low 500s. So getting a credit card is very difficult at this point. Most banks will be ready to give you a secured credit card though. The difference between this card and a regular major credit card is that you put a deposit in this card, usually about $500, and you are given a credit limit of the same amount you put in. As you use the secured credit card, and pay it back, you will be improving your credit score because the bank reports your good credit activity to the three major credit bureaus. 2) Know your score and keep track of your credit report. The best way to keep track of how your credit is improving by requesting a regular credit report. You can do so by requesting a free report from AnnualCreditReport.com. Be sure to dispute any errors you find and track your actual credit score through your bank to make sure your activities are actually having an impact. If your bank doesn’t offer you the ability to monitor your credit score, you can purchase this directly from one of the major credit reporting agencies or use a credit score service. 3) Get a retail card. Although department store or retail store credit cards aren’t the best choice of credit cards due to the high interest rates, sometimes this is your only option. In cases of recovering your credit score after bankruptcy, more than likely that retail card is the one you will be able to get. Apply for a card at a retail store you will actually use so you are making those purchases work in your favor. 4) Pay off your balance in full each month. Be sure at this stage of your credit history that you are keeping yourself on good rapport with your bills. Pay your bills off each month. With your credit cards, make small purchases and pay these off with each incoming bill. You don’t want to dig yourself in a hole again and find yourself in the place you were before you filed bankruptcy. Improve your score by paying that balance in full. 5) Prepare a budget for yourself and save. Your best option for success when managing your money and improve your credit history is to give yourself a budget to stick to. Prioritize your bills and necessary household purchases, such as groceries and gas money, and then give yourself a specific amount of spending money to last until your next pay day. For the best options for success, start a savings account. Talk to your local bank about some options for you and find out how you can get a savings account that accrues interest. This is the best way to save for the rainy day you know will likely come and be prepared for it.