Credit & Bankruptcy
It is difficult to rebuild credit after bankruptcy, especially if you have any negative notation on your credit report after bankruptcy. A bankruptcy is a public record that is recorded and picked up by the credit reporting agencies. The Fair Credit Reporting Act allows a bankruptcy to remain onyour credit for up to ten years. It is definitely possible to rebuild credit after a bankruptcy.
However, most creditors want some distance between the time the bankruptcy was discharged to the time of the application. Most lenders will not consider looking at your application for at least two years from the date of the discharge. Most individuals at some time in their life will undergo a financial hardship. Bankruptcy does not carry the stigma it once used to. Fortunately, there are several ways to rebuild credit after a bankruptcy. However, reestablishing a good credit history after a bankruptcy will take some time. The process does not occur overnight. More importantly, you should always pay your bills on time so that a negative mark will not be entered on your credit report after your bankruptcy.
There are several ways that you can rebuild credit after bankruptcy. Initially, you can start rebuilding your credit by obtaining a secured credit card. There are several banks that will provide you with a VISA card or Mastercard if you secure it with a deposit at their banks. You should check with several banks in your area to see if they offer a secured credit card plan. When you obtain the secured credit card, you make small purchases and pay the purchases off on time with each monthly statement. By doing this, you will begin to show a good payment history.
Another way to rebuild credit after bankruptcy is to get a friend or a relative to cosign a loan for you. Also, car dealers have special deals for individuals who have filed bankruptcy. However, these dealers see you as being a high risk. Consequently, you have to pay a large deposit and are charged high interest rates, annual percentage rates, set-up fees and the credit limits are low.
Some companies allow individuals to rebuild credit after a bankruptcy through unsecured credit cards. These companies also see you as a high risk. Thus, you are charged high interest rates and annual percentage rates. However, after you have established a good credit history for at least two years, you can close the account and obtain a better low interest credit card.
You should obtain a credit report periodically to make sure that there are no errors. Remember, you can only rebuild credit after bankruptcy by establishing a good credit history. You should never pay any of your bills late.
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