Bankruptcy can be devastating to your credit score, but if you know how to bounce back it can be easy to get your credit score back up. If you want to build your credit back up fast you have to get and use credit. A bankruptcy can technically stay on your credit score for up to ten years, but according to MSN Money, “if you adopt responsible credit habits such as paying your bills on time, using only a small portion of your available credit and not applying for too much credit at once (2009).”
People interested in improving their credit scores can opt for a secured credit card and payroll deduction credit cards. “One can get approved for a secured credit card within 6 months of a bankruptcy discharge. The card is secured by a cash deposit that acts as a collateral for the same. Although, the fees required for secured credit cards are much higher than those levied on unsecured credit cards, the consumer may find it difficult to get approved for unsecured credit cards due to poor credit scores (2009).” The only pre-requisite for a payroll deduction credit card is that the applicant must be employed because the money that is used for the card is deducted from the person’s paycheck over a 2 month period.
According to Smart Money, here’s how to raise your credit score as quickly as possible after declaring bankruptcy:
- Damage control
- Get new credit cards
- Piggy bank
- Bigger loans