Bankruptcy inevitably harms a credit score. However, within 12 to 18 months after you have had to declare bankruptcy, you can work on rebuilding credit. Here are some tips to help you accomplish this.

Pay Off Debts

Paying off existing debts should be one of your top priorities in rebuilding credit. To make this happen, work out a budget based on the income you bring in each month. Set aside a fixed amount or percentage so that you can gradually eliminate your debts.

Monitor Your Credit Report

After you have paid off your debts, check your credit report to ensure that they are listed as discharged. If you find any mistakes in the report, write to the credit reporting companies to resolve the disputes. They are usually obligated to investigate the issues within 30 days.

Obtain a Credit Card

Although after bankruptcy your credit score may preclude you from getting a conventional credit card, there are still options open to you. For instance, by putting down a deposit you can obtain a secured credit card. The amount of the deposit is your credit limit. Alternatively, you can become an authorized user of the card of a family member who has good credit; in this way, you can benefit from their positive payment history.

Make Careful Use of Credit Cards

Once you can obtain a credit card, use it wisely. Purchase only what you can pay for, and every month pay your full outstanding balance. Keep your credit utilization ratio, which means the percentage of the card’s limit you use, under 30 percent.

Improve Your Payment History

A credit builder loan is a secured loan that you pay off in installments every month to rebuild your credit score. You can also opt to take out a personal loan with the assistance of a co-signer; making payments for this loan on time will help you in rebuilding credit.

Create a Fund for Emergencies

Unexpected expenses can sometimes prevent you from making regular payments, and then your credit score will suffer. To prevent this, set aside a regular amount of your income into an emergency fund. You can use this fund to handle your payments in difficult times.

For more advice on rebuilding credit, get in touch with Progressive Capital Funding.