Do It Yourself Bad Credit Repair After Bankruptcy

Re-establishing your credit after a bankruptcy is very much like building it up for the first time, but with an additional challenge. The bankruptcy will stay on your credit reports for seven to ten years so you must repair your credit well enough to offset the negative effect. You don't need to hire anyone for bad credit repair. No one can magically restore a good credit rating. You can do it yourself as long as you are prepared to be patient and manage your money and credit cards responsibly.

Instructions

1

Get a credit card and use it for small purchases each month. You will most likely have to get a secured account after your bankruptcy. It will be guaranteed by a bank deposit in the same amount as your credit limit. Secured cards are easy to get even if your credit rating is bad because the lender doesn't take any risk. It simply takes your deposit if you default on your payments.

2

Pay off your credit card balance in full every month and make sure your payments are received before the deadline. This establishes an on-time payment history, which is the single biggest factor in raising your credit score according to FICO, the biggest scoring company. It also shows you can use the card properly without running up too much debt or skipping payments. This will make you look more attractive to other creditors.

3

Apply for an installment loan to diversify your accounts. FICO gives you a higher score if you have a mix of revolving credit, like a credit card, and installment accounts like car or furniture loans. Furniture stores, appliance stores and other retailers may open an account for you if you put down a large deposit and have built up a good history with your secured card for several months.

4

Open an unsecured revolving credit account. You may have to start with a gasoline credit card rather than a Visa, MasterCard or other major brand as they are often easier to obtain when you've had some credit problems. Using it and paying it promptly will repair your credit enough to qualify for a regular card after about six to twelve months.