Rebuild Your Credit After a Bankruptcy
Unfortunately, we get debt that’s too high and unfortunately we have to file bankruptcy. So the question that I have is how do you rebuild your credit after you filed bankruptcy? Bankruptcy doesn’t mean the end of the world. Many people believe that they cannot rehabilitate themselves after they filed bankruptcy. Well, it is possible, but it will take time, discipline, and persistence.
Achieving a good credit score is a realistic goal that can be achieved even after you file bankruptcy. It can be done by making wise financial decisions. It is critical that you start by developing a budget and sticking to the next thing that you’ll have to do is to use credit sparingly. We have developed a comprehensive credit coach with dispute lenders to help you rehabilitate your credit.
Now, what are the five things that you can do today to start improving your credit? Remember, creditors are primarily concerned with seeing that you are a responsible borrower.
The first thing that you can do is apply for a new loan. It is essential to understand that the fastest way to improve your credit, beyond disputing errors on your credit report, is to get credit and to pay that credit on time. Instead of getting a credit card, you may want to apply for an installment loan because installment credit is viewed more favorably than revolving credit. So, if you get a loan, commit to paying that loan on time.
Next, get a secure credit card. This may sound contradictory to the previous suggestion, but accumulating credit is critical. The difference with this suggestion, however, is that you will only use 30% of the available balance and because it is secure, your monthly bill will be paid on time. This will automatically improve your credit score.
The third thing that you should do is get a co-signer or guarantor. The old saying rings true, “birds of a feather flock together.” If you get credit with someone who has stellar credit, their good credit mojo will rub off on you. It is essential, however, that you allow the co-signer to continue to operate as usual and make timely payments. Don’t ruin the trust relationship by using the credit. Allow them to rub some of their excellent credit off on you.
Fourth, secure a bank loan with a certificate of deposit if you have $500 or $1,000 open a certificate of Deposit. Ask your Bank or Credit Union to give you a loan against that money. Once you have this CD and loan, have the bank automatically draft payment out of that account to pay off the loan. You will probably have a net negative on this account because the interest that you will receive will likely be less than the interest you will pay. It will not be significant enough to make a difference, and this hack will help you improve your credit score.
Finally, purchase something from a local merchant, typically local stores or less strenuous and may allow you to purchase an item on credit. You will likely have to pay a down payment and interest rates that will be maybe a little bit higher. This is a good approach, but you will have to make sure that the merchant reports your payment history to all three of the credit bureau. You will also have to make timely payments.
[gr-campaign id=”bfYQ” width=”100%” height=”600px” scroll=”auto”]