During bankruptcy your credit will be damaged from creditors updating account status as "account included in bankruptcy" These accounts will all have an unpaid balance. The first step in increasing your score after your bankruptcy is discharged is to update these balances with zero. Send out letters to the agencies indicating "included in bankruptcy, change balance to zero". Your score will increase for each account with this status change.You can continue to rebuild your credit by getting a secured credit card. With these cards you deposit a set amount of money which you can then draw on using the charge card. These card's are reported to the credit bureaus the same as a regular or unsecured credit cards. Be sure to shop around to find the card with the lowest fees.
Getting a cosigner is a great way to re-establish your credit rating after a bankruptcy. Get a small loan that you can easily repay, and make all the payments on time. Once this loan is paid off, go back to the same place and ask for another loan, this time on your own.
When applying for a mortgage after a bankruptcy, the lender will closely scrutinize your payment since the discharge date. The lender wants to see a perfect payment history with no thirty day lates on your mortgage history or other consumer credit lines. If you have multiple late payments following a bankruptcy the lender may see this as a continuing pattern and it could be difficult to qualify for a mortgage.
When considering rebuilding your credit after bankruptcy its important to realize its going to cost a little interest. The secured credit cards will have higher rates, thats ok. One trick is to open a jewlry account with a jeweler that offers in house financing. Make sure they report to the credit bureaus prior to opening the account. Some offer the financing but don't report. You can finance a piece of jewelry for 6 months. Make sure you don't pay it off early. The entire goal is to have the item report positive on your credit.
Continue to follow up and review your credit report. Many times, old accounts that have been cleared will continue to linger on your report. Take a look at your credit report periodically to make sure there are no errors.
