I've written multiple times about my own bankruptcy and having to deal with the aftermath of a ruined credit score. I have also had to learn ways to bring my credit score back up to a good level.

The classic way and most common suggestion is to make sure that you make all your payments on time and keep your debt ratio around 30-50% (or less) of the credit that is available to you. These two ideas will never fail in helping you achieve and keep a good credit score, but there are a few other ways as well.

This should be done regularly whether your score is good or bad, as mistakes do happen. Over the years I have combed through my reports a couple of times to make sure they are as up to date as possible and inaccuracies are removed that can hurt my credit score.
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Since all of my old credit was included in the bankruptcy I had to start over with some new credit. After cleaning up my report I wanted to establish good credit, prove to those who check my scores that I'm not damaged goods and that I've turned over a new leaf. But I had to take it slow, if I had to many inquiries on my report, it looked bad. If I had too many newly opened accounts, that also looked bad for my future.

A secured loan is one uses your existing money as collateral and the credit union then reports to the credit bureaus. A credit union I was already with was the best place to get this, but you don't have to be an existing member with many credit unions any longer. This type of loan was an installment loan that I paid back monthly, but in my case I set the money aside and used the loan to pay itself back.

You need a variety of types of loans/credit on your account, and again, since credit unions are very forgiving in regards to bad credit, I went with them on this as well. With this type of card, your past credit is less important as you will be opening a savings account to secure the credit line on the card. By putting money into a savings account, you will be allowed to charge up to amount in your savings, on the card.

The first unsecured credit card I got was from a store, I can't remember which one but I do remember being approved and then just putting the card in ice so I don't use it but once a couple of months. Since stores have such a high APR already they seem to approve people pretty easily, especially if the store has pretty high mark ups on products, like furniture, jewelry and tires.

After my bankruptcy, I was trigger shy and wanted to cut up the cards after they came in the mail. But in order to jump my score up higher, I had to use them. 20 dollars a month was an easy amount to pay off on time and keep the credit companies happy that I was an active user and responsible with the credit approved to me. If I had kept the balances at zero for long periods of time I wasn't showing that I was credit worthy, I was showing them that I couldn't handle all the credit I was given and shouldn't have been given that much. Between a rock and a hard place.

This final option is one I purposely placed last as I don't think it is a great idea, but is an option if trust is very strong

You could become an authorized user on a person's account with whom you have no trust issues. This option still allows you to build up your credit but the credit agencies don't put as much priority on this type of credit building as they used to.

When you become an authorized user on someone else's credit card, the credit/debt ratio is reported on your credit report as well as the master account holder. As long as they keep the account active and in good standing it will look good for you as well. The best way to be an authorized user is to have them call the company and add you, then when you get the card, give it back to the master card holder as you don't have to use it to reap the benefits.

You will need to display at least one year of positive credit habits to be taken seriously when you pick up a car payment and especially for a mortgage.


  1. Anne // Wednesday, January 19, 2011 7:37:00 AM  

    Thank you for this post. I am just now in the position to start wondering about how to reinvent my credit rating and this is just the info I needed.

  2. Andrew Mooers // Thursday, January 20, 2011 8:00:00 PM  

    When you have less money to manage, you are better at impulse spending control. Having everything you need not want is the key to contentment, living within your means or below a tad to tuck it away for savings.

  3. Dawn // Friday, January 21, 2011 5:26:00 PM  

    Glad to be of assistance. I found Creditinfocenter.com a wonderful confidence booster as I worked with the issues related to my credit. Check out their forum.