After filing for bankruptcy, it’s normal to see your credit score drop. Bankruptcy filings can stay on your credit report for seven years if you filed Chapter 13 or 10 years if you filed Chapter 7. Fortunately, California residents can take certain steps to rebuild their credit after bankruptcy.
Review your credit reports
Life after bankruptcy is initially overwhelming, but you should request copies of your credit reports to review them. Sometimes, there may be errors that can impact your score. If you find any, immediately report them. You should also check your credit score monthly to ensure that it remains the same. It should gradually improve.
Use a secured credit card
When you’re rebuilding your credit, a secured credit card is one of the best tools available. If you don’t already have one, apply now. A secured card lets you use a deposit of your own money toward your credit line. Although there’s usually a high interest rate and annual fee tied to these cards, they’re helpful in allowing you to rebuild your credit. It can help you in life after bankruptcy.
Make timely payments
When you use your credit card, always make timely payments and pay a little more than the minimum. On-time payments can help when you’re working to rebuild your credit as they make up 35% of your credit score. The more payments you make on time, the better your score will improve, and you’ll have a better credit reputation.
Have a cosigner
If you need to apply for a new unsecured credit card or loan, have someone act as your cosigner. It should be someone with good credit who you trust. Having a cosigner can improve your odds of being approved for new credit or loans.
Using these tips, you should begin to notice your credit score improving. Bankruptcy may feel like a setback, but it can also be a tool to give you a fresh financial start.