Unfortunately, there’s no “quick fix” solution to revive your credit score. The bankruptcy will remain on your credit report for several years before it drops off. In the meantime, however, there are a few steps you can take to minimize the damage.

The first, and most obvious, step is to resolve to avoid the same mistakes that lead to bankruptcy in the first place. Never pay bills late, and never, ever allow a debt to go to collections. If you dispute any amounts owed, try to negotiate an amicable resolution and avoid letting the matter become the subject of litigation from which a judgment could arise. Don’t allow companies such as credit card, cell phone or mortgage companies to pull your credit score unless you have narrowed down your options to just a couple of companies, since excessive credit pulls can damage your credit score. Examine your credit report at least twice a year and write letters to the credit bureaus to correct any inaccurate information that could damage your credit.

That’s all well and good, you say, but what steps can I take to actually improve my credit score?

One way to improve a credit score is to make credit card payments on time. If you have no credit cards and your credit seems insufficient to obtain a new credit card, check with a personal banker at your local bank about low limit credit cards (ranging from $100 to $300). If your bank does not offer this service, many major department stores offer similar cards that are targeted toward the college student market. These low-limit cards often do not require a minimum credit score. After you have obtained such a card, use it only occasionally (and only for essential items that you would need to purchase anyway) and pay it off every month. This will result in a positive report to the credit bureaus and will show on your credit report as “Pays as agreed.”

Another way to make payments resulting in a positive report to the credit bureaus is a small, secured loan from your bank. The personal banker at your bank may be able to help you secure a small loan (such as $1,000) that is secured by a CD or savings account of the same amount. Make payments on this loan every month and a positive report will be sent to the credit bureaus. Please note that this method is only possible if you have extra cash available with which to secure the loan, and you should also bear in mind that you will be required to pay interest on the loan. Only use this method if you are in a financial position to make these payments in order to add a positive report to your credit report.

Finally, know that a bankruptcy does not remain on your credit report forever. Eventually it will be removed. At that point, if you have been careful to protect your credit, your score will improve, gaining you greater financial freedoms.

Article Written by: Kristen J. Welcome