After filing for bankruptcy, a strategically designed financial recovery plan can help you get back on the road to financial freedom. Sure, there are many companies out there promising to rebuild your credit overnight and give you a magically high credit score, but the only true (and legal) way to boost your credit score is with hard work, diligence and a smart financial plan devised with an experienced bankruptcy lawyer. Here are steps you can take to raise your FICO score:
1. If you know you're about to file for bankruptcy, pay off at least one of your low interest rate credit cards. If your creditor allows you to keep the card(s) after you file for bankruptcy, you'll have positive activity on your credit report, right from the start. Additionally, you can keep your previous line(s) of credit to help you rebuild your FICO score.
2. Contact all creditors to see if they are willing to remove their zeroed-out balances from your credit report, as opposed to leaving them notated as charge-offs. This will help you decrease the number of blemishes to raise your score faster. Target high-interest credit cards first.
3. Only spend what you have the cash to afford. Although it may seem obvious, poor choices in credit card spending likely got you in over your head in the first place. Don't make that same mistake twice. Use your credit cards to regain a positive credit history, but immediately pay them off, even before your bill arrives, to avoid slip ups. You may even be required to put cash down on new accounts as collateral.
4. Sign up as an authorized user on a third-party's credit card. This could be a friend or family member's card. Even if you don't make any purchases, the credit bureaus will reflect this as positive credit history.
5. Check your credit report often to clear up any errors immediately. You are entitled to a free credit report annually under Federal law, but you might want to invest in a program that allows you to check it more frequently for a monthly fee.