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Financial Bankruptcy

By
Real Estate Agent with Ricks Credit Advice

Financial Bankruptcy

Financial Bankruptcy, unfortunately, is a realty for most Americans and once you file it, your credit score will be effected negatively. However, this does not mean that you will never be able to get loans, and it certainly doesn't mean that you will never have a good credit history again. After your bankruptcy filing it would be difficult to to get credit, however, it is not true that you will have to wait for an entire ten years to get credit after bankruptcy.

Establishing credit after a recent financial bankruptcy is very important adn there are many reputable credit repair companies who can help, one such company who is in the forefront of credit repair for consumers is American Debt Enders. For the most part, many consumers acquire excessive debt due to lack of credit responsibility. Hence, after a bankruptcy is discharged, many people are hesitant to obtain new crdit accounts.

However, opeining a new credit acount is the first step to rebuilding credit. Low credit scores are very common following a bankruptcy. This makes it difficult to obtain mortgage, auto loans, etc.. Here are some helpful tips to help increase your credit score after a financial bankruptcy.

Understanding the Usefulness of Credit Scores after a Bankruptcy Filing

If you are hoping to make a purchase using credit, credit scores are essential. Prior to obtaining any sort of credit, lenders must assess a cpy of your credit report. In some cases, lenders simply review your three digit score. This is practical when approving an applicant for instant credit. Those with a low credit score are at a disadvantage.

Following a bankruptcy, you can expect your credit score to nosedive. Thus, it is important to take the necessary steps to improve your credit standing. Bankruptcy does not last forever. However, you must put forth the effort to boost your credit and prove your creditworthiness.

Avoid Repeating Past Mistakes

If bad credit or bankruptcy occurred because of using credit unwisely, learn from your mistakes and move forward. Many young adults acquire an excessive amount of debt. In some instances, they do not fully understand how credit works.

If you are drowning in debt, bankruptcy may be the only alternative. If so, avoid making the same mistake twice. Sadly, there are individuals who file bankruptcy repeatedly. However, rebuilding credit takes time. Once you are on the path to increasing your credit standing, avoid bad credit decisions.

Establish New Credit Accounts

The only approach for establishing new credit is opening new credit accounts. At first, this may sound scary. However, this maneuver is necessary to quickly increase credit scores. New credit accounts may consist of a major credit card, store credit card, automobile loan, etc.

Secured credit cards are very effective and easy to qualify for. These sorts of credit cards require applicants to have a down payment. However, it’s well worth the fee. Once you have obtained a new credit card, attempt to do three things: make timely payment, maintain low balances, payoff the balance each month. By doing so, each month your score will increase. Soon, you will qualify for an unsecured credit card. Within 24 months, you may also qualify for a mortgage or auto loan with a comparably low rate.

Credit after bankruptcy is difficult to achieve, but if you need credit, you should be able to get it and you may even be able to purchase a house. I have personally known many individuals who have increased their credit rating to A status within 3 years of bankruptcy discharge. So do not let anyone tell you that you will never be able to get a loan, buy a house or lease a car for 10 years, it is not true by any means.

For more information about credit and finance go to www.RicksCreditAdvice.com

Show All Comments Sort:
Greg Steffens
Mountain Country Realty - Lake Arrowhead, CA

Rick - Welcome to Active Rain and congrats on your first post.  Be sure to spend some time looking around at what and how others are blogging here.  It is a great education and lots of fun.  Looks like you're off to a great start...keep it up!

Aug 18, 2008 08:23 AM
Ron Brown NMLS #270845
NMLS ID: 40831 - Federal Way, WA

Rick,

Welcome to Active Rain! Congratulations on your first blog.  You'll find this is a great site for sharing ideas, networking, and growing your business.  If you ever have a question about VA loans, or FHA loans I'd be happy to help!

Ron Brown

VA Loan & FHA Loan Specialist

First Mortgage Company of Washington

Puyallup, WA

Aug 18, 2008 02:09 PM
Connie Rice
Keller Williams Greenville Central - Simpsonville, SC
Connie Rice & Partners - Greenville, SC Real Estat

Welcome to the rain! You've joined a great place to network, make and meet new friends and discuss lots of interesting topics. I see you are already off to a great start! Stop by if you get a chance. I would love to hear your feedback on our thoughts! Well, have great time and ENJOY. Look forward to seeing you around.

Aug 19, 2008 07:49 AM