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
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