Declaring bankruptcy is a decision that not only impacts your finances but also the state of your credit score. While your score may decrease after financial hardship, there are practical and real ways to improve it and get back on a better financial path.

Before you start taking steps to fix your credit score, it is important to know what the score is and why it’s so important to your financial future. When you apply for any type of credit — credit cards, car loans, mortgage or rental agreements, student loans — the financial agency first looks at your credit history to determine if they should lend to you or not. Many lenders use FICO scores as part of those decisions. If your FICO scores are in the mid 700s or above, that generally means you have good credit and it shouldn’t be difficult for you to get approved, provided you meet lenders’ other requirements.

How Do I Improve My Credit Score?

It is important that you understand what happens when you file a bankruptcy. A bankruptcy can remain on your credit report for up to 10 years and there is a good chance your FICO score will be low until you have started rebuilding your credit. You can take the following steps to start raising your scores after bankruptcy.

1. Review Your Credit Report

The first step is knowing where you are and where you need to go. You should obtain a copy of your credit reports and make sure there are no errors or inconsistencies. You can try Credit.com’s free Credit Report Card for an overview of your credit standing and an explanation of how it’s broken down, and you can request one free copy of your credit report per year from Equifax, Experian and TransUnion at AnnualCreditReport.com.

2. Pay Bills on Time

Your payment history makes up 35% of your credit score. One of the easiest ways to improve your score is to always make sure you pay bills on time.

Tip: Set up reminders on your calendar to pay bills every month by the due date. Many banks and creditors offer services that allow you to set up your payments electronically so you don’t forget.

3. Apply for Credit…Cautiously

If you didn’t keep a major credit card account open during your bankruptcy, it’s a good idea to get one after your bankruptcy has been discharged. You may have to start with a secured card, which requires that you place a security deposit with the issuer. Once you get the card, it’s perfectly fine to pay the bill off in full each month. You don’t have to carry balances on your credit cards to build good credit.

4. Add a Loan Down the Road

Once you have gone a year or two post-bankruptcy, consider getting a car loan or line of credit. If it’s a car loan, buy a vehicle that is affordable and that you can pay off successfully. You may receive a higher interest rate to start. Shop around for the best rate, and keep in mind that once you have raised your credit scores, your next interest rate on a loan will likely be lower.