How to Rebuild your Credit After Bankruptcy:
- Open a checking and/or savings account. When lenders see that you
can responsibly handle these accounts, this facilitates your ability to
get loans.
- Apply for department or other store credit cards or gas credit cards. Even
if you would normally pay cash at these locations, as you use the credit cards and make the payments each month, this goes a long way in helping
you to reestablish your credit.
- Apply for a secured credit card. Here you secure the credit card with a
cash deposit and charge against this cash deposit. This will be reflected
in positive marks on your credit report.
- Make sure you pay your utility bills and rent or mortgage payment on time.
- Have a friend or relative cosign on a loan with you and pay the loan
back on time.
- In looking for auto or home loans, look for car deals and mortgage brokers
that indicate that they are "bankruptcy friendly". Buy a used car so that
you don't get hit with the depreciation occurring during the first two years of a new car purchase.
- Don't fall into the "bad credit" trap of high interest payday loans.
- Write a letter to each credit reporting agency explaining the circumstances
that lead to you filing bankruptcy.
- Make sure that you live within your means. Don't unnecessarily increase
your debt to income ration by taking on credit to purchase luxury items. Your payments on consumer debt should not be more than 20% of your
expendable income after costs for housing and a car.
- Pay your reaffirmed, pre-bankruptcy debts on time.
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