Money Talks, So Should You

Dealing with Money: Rebuilding my credit score after bankruptcy

by C., Dimespring 30 (@dealwithmoney)

I know it sounds crazy coming from someone who filed for bankruptcy, but I want to start rebuilding my credit.

Credit scores affect more than just the ability to borrow money. They can make or break major things in your life, like employment, insurance, housing and even personal relationships. And that's why I want to get my score in the best shape possible, as soon as possible.

Right now, my score hovering in that dreaded 600s range. Amusingly enough, it rose a bit after I declared bankruptcy. I'd like to get it up to where it was before everything fell apart.

Here’s the game plan: I figure I will use a credit card to pay for the things I know I have money for (like my monthly utility bills, and necessities), and then use my savings to pay off creditors as I go. Hopefully keeping up with this routine will help prove that I'm a creditworthy individual.

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However, I’ve already made one big mistake. Apparently you're not supposed to apply for cards with companies that were included in a bankruptcy. Oops. The card I applied to was with a bank that I'd screwed up with before. The requirements aren’t too stringent, so I’m keeping my fingers crossed that I’ll get the card anyway.

If I don’t get approved, I’ll have an unfortunate inquiry on my credit report (too many of those will make me look irresponsible), but I’ll just have to keep trying.

Getting rejected by credit card companies is a familiar feeling for me. After my bankruptcy, I spent years getting turned down flat; There was just no way I was going to qualify.

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Now, with my bankruptcy behind me, a few creditors might be willing to extend credit to me again, especially since they know I wouldn't be able to file bankruptcy again for quite some time. Make no mistake: The bankruptcy I went through last year is my first, and if I have anything to say about it, my last  bankruptcy. I have no plans to ever file again. I made my stupid young-person mistakes, and I'm ready to get a fresh start.

Counterintuitive as it may seem, I believe a new credit card is the first step on the path back to solid financial footing. 

C is a 28-year-old college graduate with an interest in personal finance. When she graduated in December 2010 with nearly $42,000 in college debt and no job prospects, she knew it was time to change the way she thought about money. She is currently figuring out a way to pay back what she owes and build a more stable financial future. C is a member of the Dimespring 30, a community of bloggers sharing their thoughts, experiences and perspectives on personal finance.