As the recession gets worse, more and more Americans are falling into debt, and more of us are declaring bankruptcy every day. Bankruptcy can be seen as a fresh start, relieving you of much of your debt and payments, but it will also tear up your credit score, staying there for ten years, and decreasing it by several hundred points. In most cases, bankruptcy should be viewed as a last resort because of how important it is to maintain a healthy credit score. If you are forced to file for bankruptcy, there are certain measures you should take to ensure that you can get on the road to financial recovery as quickly as possible.

The first step to rebuilding a healthy credit report, obviously, is to be aware of what it is. Be sure that it’s free of mistakes or errors because inaccurate information will extend the amount of time that it will take to score high enough for conventional credit. Everyone with a credit score is entitled to a free credit report every twelve months from each national credit bureau. That means you could check your score at all three bureaus at once to compare the scores, or check your credit score every four months to make sure that the information is accurate. Either way, make sure you are on the up and up.

After bankruptcy, it is a smart idea to obtain a secured credit card. Usually, these cards are credit cards that are secured by a deposit account (generally a savings account) that the cardholder is owner of. These cards are made for people with poor credit so that they can stay in low credit-limit situations for a long time at a high interest rate, so that you can build up a good history after bankruptcy. Additionally, having more than one kind of credit line will help improve your credit report.

One of the keys to having a good credit score is to have at least two credit cards from well known and respected banks, and other payments such as a house payment. The people who have excellent credit reports keep balances below fifteen percent of available credit every month. Around ten percent of your credit reports is based on the kinds of credit that you use.

Another ten percent is based on new credit accounts that include credit lines that you are able to establish after filing for bankruptcy. Bear in mind if you are looking to repair your credit after declaring bankruptcy that some credit “doctor” or credit repair businesses might make sensational claims that they can miraculously fix your credit file, many times for an exorbitant fee. It is pertinent to remember that only time, not some magic cure can cause your negative credit history to drop off of your credit score.

Mallory Megan works for Rapid Recovery Solution and writes articles on commercial collection agencies.

In the last article I spoke about debt settlement programs and whether it pays to agree to one or not. Keeping all of this information I relayed to you in mind, if you decide that debt settlement isn’t the best option for you, there are four other main options: remain delinquent, come up with extra money to make payments, work with a credit counselor, or declare bankruptcy.

Remaining delinquent will only make your credit score worse, and the longer you wait, the harder your score will be hit. Just one thirty day late payment can cause your score to fall by up to one hundred and ten points. Ninety days? You are currently three times as late with your card payment, and you are only getting later as more time passes on.

Coming up with extra money to make payments may just be worth your while. Take a look at your budget and finances. Is there anything that can be sold or adjusted? Use any extra money to pay your debt and prevent any further damage to your credit score. For a lot of us, budgeting is not as easy as that. If you need outside help, look for a credit counselor. They will get to the bottom of the problem, and find a solution.

Additionally, you also have the ability to consider filing for bankruptcy. This means that you will not have to pay back the debt, but filing will cause your credit to drop even more than a debt settlement will, by as much as two hundred and forty points. If you are considering bankruptcy, have a consultation with a bankruptcy attorney to discuss the details.

All told, experts say that talking to a good credit counselor is the best choice. They can assist you when it comes to assessing your financial situation, offer possible alternative choices, and show you how not to make the same mistakes at any point in the future.

Rapid Recovery Solution is a national debt collection agency.

Last Thursday, a man who ran a debt buying company in Florida was sentenced to six years of federal prison time for the crime of selling debt portfolios that he did not own. Steven Goldberg, of Golberg and Associates in Boca Raton, took the heat from the District Judge who slapped him with 71 months in federal prison followed by three years of supervised release. Goldberg pled guilty to one count of mail fraud and eight counts of wire fraud.

Authorities say that Goldberg would turn over falsified files and fake evidence that he owned the files to other companies. To add insult to injury, Goldberg also sent buyers fake transaction numbers and other bogus financial information. All in all, debt buyers were taken for more than $3.3 million. Investigative reports showed that many well-respected accounts receivable management companies were hoodwinked.

Parties involved were the U.S. Secret Service, the U.S. Postal Inspection Service and the Boca Raton Police Department. Federal criminal charges against Goldberg have been satisfied, but there are still many many civil cases pending against him.

Although the federal criminal charges against Goldberg have been satisfied, there are still numerous civil cases pending against him. An official from a major collections company weighed in with his opinion.

“Our industry doesn’t do a great job of policing itself,” he said. “Debt buying companies should be more vigilant when they screen members for criminal backgrounds. Goldberg had prior convictions, including felonies.”

The debt collection industry can do many things to protect itself, experts believe. Publishing a list of any lawsuits that one member files against another member, or requiring criminal background checks would be good ideas. Either way, Goldberg has a long vacation in jail scheduled, and when he gets out, you better believe that any money he owes in Civil Court will be aggressively collected.

Mallory Megan is employed by a debt collection agency. She also writes stories on business, finance, consumer spending and collection agencies.