6 steps to rebuild a perfect credit score after bankruptcy discharge

Okay the BK is discharged. Now let's start rebuilding your credit score. This not a quick fix. It also assumes you have effectively dealt with whatever caused you declare bankruptcy whether it be situation, lifestyle, or lack of financial capabilities.

This strategy is front-loaded with a long term payoff because of the BK credit restoration timeline. A BK can be on your credit report for up to 10 years. The good news is that its impact lessens on your credit report the further removed it is from the present. You may be eligible for a mortgage or auto loan in much less time if your other factors are strong.

​Here are the six steps to rebuild a perfect credit score:
1.Be wary of credit repair companies. 

• They can't do anything you couldn't do for yourself at little or no costs. The information to DIY is freely available from credible non-commercial education sites or non-profit counseling agencies.

2. Start now. Be patient.

• The length of your credit history impacts about 15% of your score. All accounts included in your BK will no longer impact and eventually disappear from your credit report in 7 years or less. After BK stops reporting you will have 7-10 years of pristine credit accounts. At that point, only active accounts will be reporting.

3. Become an authorized user
4. Check your credit reports 90 days after BK and then at least annually thereafter. 

• Fix everything that is wrong on your report.

5. Use financial services products that build credit.

• Get a secured credit card quickly, if it's your only option. All types of credit cards, secured, unsecured, gasoline, store, etc are revolving accounts. Also, these are generally low limit cards. 
• This category makes up 30% of your credit score. Therefore you must optimize this credit scoring factor if you are going to have a future score above 750.
• CUR or your credit utilization ratio is what impacts your credit score the most. Pragmatically, this not much of a factor so soon after a BK. Its impact on an already bad credit score isn't the only factor that will stop you from getting a loan at this point. 
  • A credit utilization ratio of 10% or less will be your goal. However, achieving that can be difficult with low limit credit cards. A $500 limit secured credit card would only yield $50 credit usage.
  • What is more important than your CUR at this point in your rebuilding journey is that you develop the habit of paying your credit card statement balance in full every month by the due date. You should focus on building a solid revolving credit payment history without CUR concerns at this point.
• Get an unsecured card ASAP. If you do well with your secure card, you will start to get offers for unsecured cards. The terms on these credit cards are often not pretty but they are unsecured. Once you get one of these, you no longer no need a secured card. You will be able to get your security deposit back.
  • Be careful closing this account too fast. Unknowingly doing so can set your credit score improvement efforts back significantly by devaluing your length of credit and payment history. After you obtain your second or third unsecured card you can probably close the secured card with negligible future impact
  • Pay close attention to the CUR on this card and all other revolving accounts. Pay the statement balance in full by the due date each month.
• Get a share loan from a credit union or bank. In the worst-case scenario but guaranteed approval scenario, you will need money to do this, just as you do for a secured card. In essence, you go borrow an amount of money equal to or less than you have on deposit with the financial institution. They will use your funds as collateral. Then repay the loan over the full term to generate maximum payment history. Do it again at the end of the first loan, if necessary.
  • Installment loans payments impact your credit score the same regardless of the amount. Here’s one case when size doesn’t really matter. Payment history and account type do.

6. Create Credit Diversity

---