The amount of time it takes to rebuild your credit after bankruptcy varies by borrower, but it can take two months to two years for your score to improve. Because of this, it's important to develop responsible credit habits and maintain them even after your score has increased. In fact, by following a handful of proven methods, you can improve your credit score almost immediately. Even though bankruptcy can stay on your credit report for up to 10 years, if you stick with the plan, it's possible to return to the market for an auto loan or even a mortgage in as little as two years.
You can add them to your Experian credit report with the credit bureau's free Experian Boost program. Instead of trying to get funds right away, focus on making timely payments on existing loans or credit cards every month to help restore your credit. The pre-forgiveness credit counseling you received before ending your bankruptcy should have provided information on budgeting, but if not, don't hesitate to seek help from a credit counseling agency. Ironically, credit scores that were lower before bankruptcy tend to lose fewer points than credit ratings that were significantly higher.
However, another almost effortless way to improve your credit ratings is to add alternative data, such as your utility and cell phone payments, to your credit profile. In short, consumers with better credit histories have more to lose; those with lower credit scores already have many of their financial problems embedded in their histories. However, if you use credit responsibly and avoid late payments, you can establish a favorable credit history over time and regain a solid financial foundation. You'll want to keep your balance at 30% of your credit limit or less to show that you're managing your credit well.
However, while it will be difficult to improve your credit rating at first, it's never too early to start rebuilding your credit. You may be entitled to additional free credit reports in certain circumstances, such as after placing a fraud alert, becoming unemployed or receiving public assistance, or having been denied credit or insurance in the past 60 days. Get the basics you need to stay on top of your credit, including access to an agency's credit rating, blocking Equifax credit reports, and alerts. The lender submits your account activity to credit reporting agencies and your credit will improve with your consistent payment history.
You'll need to consider whether a hard or gentle pull of your credit is required, what you would use that line of credit for, set limits on a line of credit, and have an intact repayment plan so you don't fall into a deeper debt hole. Still, you'll want a credit card because payment history is one of the quickest ways to improve your credit score after bankruptcy. A good rule of thumb when rebuilding your credit is that, regardless of what you did to pay off your credit, you should make the reserve to rebuild your credit. Frequent job changes won't affect your credit score, but lenders look more than your credit report when you file an application, especially after a bankruptcy.
