Here are the steps you need to take to boost your credit score.
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After you get your North Carolina bankruptcy discharge, one of the first steps you should take is to work on improving your credit score. That three-digit number can make it possible for you to get an affordable car loan or mortgage, have a credit card in your wallet for emergencies, and not have to put deposits down on your utilities. Here are seven tips to supercharge your credit score after bankruptcy.
We’ve said this in many posts, but this is of the utmost importance. You should always pay all your bills on time but particularly those that report to the credit bureaus. Also, if you can’t or don’t pay your bills on time, it’s a warning sign that you’re being financially irresponsible.
#1 Pay All Your Bills On Time
You need credit cards to build credit, but overusing them can wreck your credit. It’s a delicate balance that you must master. Don’t apply for a bunch of credit cards at once and only apply for ones you’re certain you’ll get. New credit is important and so is keeping older accounts in good standing.
#2 Acquire Credit Cards Wisely
In order to keep your accounts open and get credit limit increases that will improve your credit score, you must use your credit cards. But, on the flip side, you need to keep your balances low—preferably paying off in full each month so you won’t be charged any interest.
#3 Use Credit Cards but Keep the Balances Low
One of the critical aspects of your credit score calculation is the average age of credit. That means that older accounts in good standing can really boost your score. When first coming out of bankruptcy, you’ll get a secured card and may want to close it later. Don’t do it—closing out a secured card can drop your score.
#4 Don’t Close Older Accounts
In addition to having old accounts in good shape, having new accounts open will improve your score. This means that you need to open new accounts every now and then to boost your score. Be sure to only apply for credit cards that you’re sure you’ll be approved for so you don’t waste inquiries.
#5 Open New Accounts Periodically
It’s important to use your credit cards regularly in order to get credit line increases. However, you don’t want to wind up in debt. Using your credit cards for everyday expenses and paying off in full each month is a wise approach. But, otherwise, you shouldn’t swipe your plastic if you can't afford to pay it off.
#6 Don’t Buy When You Can’t Pay Off in Full
In addition to using your existing lines of credit wisely, you must make sure that your information is consistently correct and up-to-date. You also must ensure that your identity isn’t taken by others, that your payments and accounts are correctly reported, and that your hard work is displayed on your report.
#7 Monitor All Your Credit Reports
Improving your credit score after bankruptcy takes time and is a systematic process. But within six months to a year after discharge, many bankruptcy filers find themselves with much higher credit scores. Credit Score Keys can help. Contact us now to find out more about rebuilding your credit after bankruptcy.