Rebuilding My Credit After Bankruptcy. Part 2

Upon filing a Chapter 7 your debt-to-income ratio drops dramatically. Try to keep it low.

Create a realistic budget so you can pay all bills on time.

Get your credit reports again. This time you may have to pay a small fee. You want to be sure all your debts are marked “discharged.” Also, check your credit score again.

Get a secured credit card and pay the balance in full each month. Paying off your balances will boost your credit score.

Get an auto loan but be wary. There are unscrupulous used car dealers who will sell cars much over value at high interest rates. Buy a modest car with payments you can easily afford. Be sure to know the estimated values of cars. Some well-known sites include kbb.com and www.nadaguides.com and www.cars.com.

Whether you reaffirm an existing car loan or get a new car loan-pay on time-never be late.

It is best to have 2 credit cards. Even if they are secured credit cards.

If you are declined credit from a company based on a new credit report you are legally entitled to get a free copy of that report. Look for errors and bad marks.

Once a year get your free credit reports and review them. If there are errors (and there often are) you have the right correct them.

Be prepared to walk away from a bad deal. High interest can prevent you from getting back on track.

Even one late payment can drop your credit score 50 points.Avoid credit repair agencies, they’re often rip-offs and don’t do anything you can’t already do yourself.

Never use a Pay Day or a Car Title Loan. They are endless money pits.

Only get a store credit card if you shop there and pay the balance as fast as possible. Too many credit applications can hurt your credit score.

Avoid getting cash advances on a credit card. It looks suspicious to the credit agencies.