How do I increase my credit score after bankruptcy?
If you already have a home or car loan in your name, every time you make a payment on time, you are improving your score. The key here is not to default after bankruptcy. Also, you will be inundated with secured credit card offers after discharge and even while your case is open. DO NOT THROW THEM AWAY! We understand you are sick of credit cards, but keep in mind that you may need to use them this time. Just don’t let them use you. We often advise our clients to open up one secured card, use it at the gas pump each week, put the money in your checking account, and make sure you pay the bill off completely each month when it comes in. Once you get comfortable with one card, open a second card. Alternate their usage. This is a great way to rack up your credit score without racking up any debt since secured cards must be paid in full each month.
Now, be careful. These banks are slick. And the games they play creep up on us and blindside many of us. They will turn your cards into unsecured cards and try to lure you into using them more and more by raising your credit limit. Buyer beware!!! Don’t stray and use these cards for anything else or they may get ahead of you. The key is never to have a balance left unpaid at the end of the month. If so, they will begin to raise your interest and the game will change. They will begin to use you. Remember, you will need to do this because this rounds out your credit score, but do not ever let your guard down. Bank rates and fees are relentless. Banks often do not have your best interests at heart and that is an unfortunate fact.
Never co-sign a loan or credit card for a friend, loved one or acquaintance in the future. If they default, even unintentionally, your score will go down with their ship. If they have a car repossessed or surrendered that you co-signed for, you will be liable and this may well destroy your credit.
Lee Abt is an Experienced Bankruptcy Lawyer in New Jersey - Call Today!