Credit World

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. 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.

It is therefore important that when you file bankruptcy, you make sure that all your accounts are included. As long as they show zero balances you can legitimately ask your creditors to stop giving the credit bureaux your details – they don’t have to report, and if you could just get one or two to stop, your credit score will lift a little.

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. Secured Credit Cards.

A secured credit card is a credit card that is limited in its credit limit to an amount equal to a deposit with the card issuer. In other words, you give the issuer a deposit of say $200, and the limit on your card is $200. This may raise the question as to why not just have a $200 cash budget and no card.

The key is to use the card and always pay it off at the end of the month, so that the credit agencies can then see you repaying credit, and adjust your rating upwards. If you always used cash instead, this would have no bearing on your credit rating.

A word of caution, some less reputable card issuers are not registered with the credit agencies, making any card they give you useless in your quest to increase your credit score. Always ensure that any issuer you go with is registered ar the credit bureaux.

Tip 4. Get Included on a Friend’s Credit Card.

This is not actually using someone else’s card! All you do is find a friend or relative who has a good credit rating, and get them to include you as a name on the card. This way you actually benefit from their credit score, and they are completely unaffected by yours!

Be careful however, because if the other person experiences financial difficulty, then this will have a detrimental effect on your rating, but as long as that does not happen, you will see an improvement in your credit rating.

For a good number folk however, difficult economic times have conspired to make repaying their debts impossible, and has left them wondering how to claim bankruptcy. If you are in that situation and need more free advice, visit www.howtoclaimbankruptcy.net. Check here for free reprint licence: Bankruptcy And Your Credit Score.

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