First Person: 5 Ways to Bring Your Credit Back From Bankruptcy (ContributorNetwork)

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Bankruptcy can wipe the proverbial credit slate clean and stop harassing phone calls and letters, but filing a Chapter 13 bankruptcy or a Chapter 7 bankruptcy sends credit scores plummeting while harming chances for offers of credit in the future. The good news is that bankruptcy is not a permanent financial death sentence. In fact, credit is a cyclical beast. Any consumer can rebuilt and restore his credit after bankruptcy discharge using these 5 basic strategies.

Get a Secured Card

At first, most bankruptcy filers will need to rely on a cash only system for living and routine expenses. After a bankruptcy discharge, it may be difficult to open up a bank account, and it will be impossible to use any other piece of plastic beyond a debit card.

Save $300 to $500 and open up a secured credit card. Secured cards require an up front deposit—hence their name, a card secured by your deposit. That deposit then becomes your credit limit. For example, if you open up a secured Visa card with a $300 deposit, your credit limit is $300. The security deposit protects the bank, if you default. The bank holds on to the deposit, until you prove your creditworthiness once more. While secured cards usually come with unattractive interest rates and features, they are by far, the best way to rebuilt credit after bankruptcy.

Use it Responsibility

For the next six months, use your secured credit card to pay for recurring expenses like gas or groceries. At the end of each month, pay the card off in full. Repeat this strategy for six months and you will see an increase in your credit score as you reestablish a satisfactory payment history. The primary rule to remember here is not to keep a balance. Credit rebuilds much faster if you pay off the balance on a credit card to $0 each cycle.

Ask for Credit Line Increases

Most secured cards will reward users by offering an unsecured credit line increase after six months of on time payments. The denominations for the increase are typically between $50 and $100, but the more of an increase in your credit limit, the faster your rating rebuilds. The key here, is not to increase your spending to eclipse your ceiling. Keep a handle on all credit expenditures, and do not exceed what you are able to pay off each month. In other words, if you know you can only afford to pay $300 per month to see your credit card balance zeroed out, don't charge $400.

Apply for Unsecured Credit

After six months to a year of timely payment history with your secured card, you can move up in the world and apply for an unsecured line of credit. You need to establish a credit mix. In other words, you need to have one credit card, one auto loan and one unsecured line of credit like a personal loan or appliance purchase to achieve the best credit building results. While credit takes time to restore, knowing the recipe for success makes an enormous difference in the timing.

Pay Everything Off Each Month

Pay off loans and credit cards immediately. Keep only one credit card on hand, and use it sparingly. For example, once you have an unsecured card with better terms, stop using your secured card; but do not close it. Refrain from closing newly opened credit lines, as this will hurt your credit. The key is to have a variety of open, untapped credit sources.

For most people, filing bankruptcy was a result of overspending and poor money management. After having taken the time and effort to rebuild your credit, don't throw that time and effort away by repeating the same financial mistakes.

More from this Contributor:

Home Buying After Bankruptcy

Come Up with a Bankruptcy Plan Before Filing Chapter 7

How a FICO Score is Determined

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Japan retail sales post first rise since quake (AFP)

TOKYO (AFP) – Japan's retail sales rose in June, marking the first gain since a devastating March earthquake and tsunami in a further signal of recovery in the world's third-biggest economy, data showed Thursday.

Sales rose by 1.1 percent on-year, lifted by purchases of machines, appliances and electronic equipment, the Ministry of Economy, Trade and Industry said.

Sales of household appliances and electronic products jumped 15.2 percent, driven in part by the rush of consumers to change to digital TV before the July 24 end of analogue broadcasting in Japan.

Apparel sales were also up 4.1 percent, as were food and beverage sales, which increased 3.2 percent.

However, automobile sales were down 17.3 percent, with consumers deferring purchases and automaker production levels still recovering after post-quake power and parts supply shortages.

Japan adopted a mentality of self-restraint in the aftermath of the March 11 earthquake and tsunami, which ravaged the northeast coast and left 20,000 dead or missing as well as crippling a nuclear power plant, triggering the worst atomic crisis since Chernobyl 25 years ago.

Convenience stores saw sales of items such as bottled water spike in the aftermath but consumers held off on non-essential purchases, entertainment and travel.

Retail sales fell 8.3 percent in March and 4.8 percent in April, before the decline slowed to a 1.3 percent fall in May.

The drop in consumption helped push the economy back into recession in the first quarter of 2011.

Economists see reconstruction spending in the second half help the economy rebound, however.

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