How to Repair Credit After Bankruptcy
After your bankruptcy has been discharged you will want to begin repairing your credit by taking steps to learn how to repair credit after bankruptcy. The first idea that you have to remember is that you will never have an outstanding credit score until the bankruptcy is dropped from your credit report. This will take as long as eight years, so be prepared for that. However, you can begin to build your credit back up, and in time, have a good enough credit report to be able to get loans at a reasonable interest rate.
Can Bankruptcy Credit Counseling Help Me Learn How to Repair Credit After Bankruptcy?
Before embarking on a path to rebuilding your credit you should see a credit counselor who specializes in bankruptcy credit counseling to get advice on how to prevent a second financial disaster from happening. It is true that many bankruptcies are not the result of financial mismanagement; there are many cases that relate directly from sickness or loss of employment, but often it is a situation of poor personal finance. If this is the case for your, make sure you get the education needed to properly budget your spending for the income that you receive. Building credit after bankruptcy requires financial discipline and bankruptcy credit counseling can be well worth the expense.
There are several ingredients that make up your credit rating. One of them is the negative marks reported by creditors, others include how much credit you have as well as making your payments on time. How long you have had an account also figures into the rating. Although the bankruptcy you went through will continue to be listed on your report, you can prevent future negative reports on your credit. A plan on how to repair credit after bankruptcy consists in making all of your payments on time, every time. Your credit will then consist of only positive reports. This combined with the gradual increase of credit available and the length of time you have an account open, will increase your credit over time.
Can I Still Get a Credit Card After Bankruptcy?
The best approach to building credit after bankruptcy will be credit cards. Surprisingly enough, it can be easy to get a credit card after bankruptcy. Credit card companies know that you cannot file for bankruptcy again for several years and must pay back whatever you charge. The credit limits are usually small and the interest rates high, but this will not matter because you will not be carrying a balance. You will have to pay an annual fee for this type of card, but that will be the cost of rebuilding credit after bankruptcy.
There are secured credit cards that you can get with a minimum deposit. Your credit limit is tied to the amount of money you deposit. Only get this type of card is you can’t get an unsecured type credit card, because you will not have access to the deposit money. If you must get this type, at least make sure that they report to all three major credit report agencies.
Once you get a card, use it every chance you get to buy those items that you would have purchased with cash. Never buy anything extra with your credit card, and always pay the balance completely every month. Never carry a balance no matter what the circumstances. Once you have used the card for a few months, try to get a second and perhaps a third credit card, so you will have several accounts. By using these suggestions in your plan on how to repair credit after bankruptcy, you will be well on your way to rebuilding your score.
Filed under: Credit Repair
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