How to re-build your credit score after bankruptcy! New strategy!

I heard a program on the radio the other day that was talking about how to improve your credit score in general so I listened.  The announcer said some of the things that I have been telling my clients with some differences.

First of all he said that you must have credit cards.  Many of my clients say that they will never use credit cards again after the bankruptcy and that is absolutely wrong.  You must have credit and use credit if you are ever to improve your credit score.  Your credit score is determined by the three credit scoring agencies who look at your financial activities for the month to determine if your score should go up or down.  These three reporting/scoring agencies are Equifax, Transunion, and Experian.

It is important to remember that you must get over the aversion you have to credit cards after a bankruptcy.  You must begin to use them wisely so they can help you and build your credit score instead of tear it down. Don’t be afraid to use them and use them wisely.  They will help you rebuild your credit score.  Don’t allow emotion to enter the equation.  You can use them to your advantage if your smart and diligent.

I was telling people to have two credit cards and this announcer said to use at least three credit cards to improve your score but we both agreed that having both credit cards and using them regularly were essential to get a maximum credit score.

He said that he paid bills with his cards and that he had around five cards each used to pay a different bill.  One was for the cable bill, one for the utility bill, one for the water bill, and others for other bills.  He would pay the bills with the cards and then pay the credit card balance in full each month.  I believe that this is a good idea.  You will therefore carry no balances and pay no interest on your credit cards.  You will though be using the credit cards to rebuild your credit score.

This kind of activity is apparently what the credit reporting agencies are looking for.  It does you no good to have cards sitting there unused.  You need to show activity and a payoff each month to slowly but steadily build your score.  And remember that multiple cards (excess of three) will build the score the fastest.

The last thing is to keep your balances low.  Never exceed 30% of the available credit on your card.  So if you have a $500 limit only charge$150 and if it’s a $1000 limit then only use $300.  Traditionally people have advised not to exceed 50% of your available credit but now 30% seems to be the better number so I’m sticking with that.

After a bankruptcy you will be deluged with credit card offers so if you file one then be prepared to use these to build your credit score.

I am a bankruptcy lawyer practicing bankruptcy law in San Diego CA.  For more information please visit my websites at or  Or call may office to speak to an attorney for free about bankruptcy or any other debt related issue at (619) 702-5015.  If you or someone you know are considering bankruptcy then get my Free e-book; “13 Things You Should Do To Prepare For Your Bankruptcy Filing” by e-mailing me at

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