Rebuilding credit after Dallas bankruptcy is a daunting task, to be sure. However, there are a few tried and true methods for getting your credit score back to normal after Dallas bankruptcy, many of which you may already have heard about: secured credit cards, co-signers, and the like. Other than these methods, you may find it helpful to learn these tips for a higher credit score after bankruptcy.
Keep Lines Open
For some people, it seems counterintuitive to keep lines of credit open for a higher credit score. After all, these lines of credit are the reason you got into debt in the first place, aren’t they? Why not close the accounts, cut up the cards, and solemnly swear never to use credit cards again? While the sentiment is noble here, the truth is a little more complicated. In fact, closing existing lines of credit is liable to hurt your credit score, even after Dallas bankruptcy. The reason is this: part of your credit score is determined by your debt-to-credit ratio, and part by your credit history. Keeping lines of credit open helps your credit score in both these regards. First, having old lines of credit open when you are not using them increases your amount of total credit available, thereby reducing your debt-to-credit ratio, almost automatically. Having a lower debt-to-credit ratio is a good way to rebuild your credit score, and your old lines of credit will help with that.
Second, those old lines of credit contribute to raising your credit score by showing length of credit history. Part of your score is determined by the amount of time your credit accounts have been open, so that closing these older accounts can actually have a real adverse effect on credit score. But keeping them open shows length of credit history, raising your score and helping you after your Dallas bankruptcy.