Bankruptcy may be the worst thing in your credit history that can
continue to plague you for years to come. However, you can still
perform
credit repair after bankruptcy and start to show improvements in
your current records. There are several proven methods on how you
can still be appealing to potential creditors and banks regardless
of your dark past.
The Bankruptcy Phenomenon
Bankruptcy can actually be a good thing for you since you take away
all debts and start anew. It also gives you peace of mind from
constant worrying on how to pay back outstanding debts. Filing
bankruptcy is the first step of the process followed by discharge of
debt then finally a credit fix after bankruptcy which is focused on
regaining financial stability, creating a sensible consolidation and
budget plan and making good on your credit history and bankruptcy
record. You can even perform credit
report repair as soon as a bankruptcy is discharged.
You will be labeled as a high risk individual (according to chapter
7 bankruptcy laws or chapter 11 bankruptcy code) limited only to a
few loan opportunities with very expensive credit made available.
The higher interest rates again put you in danger of going back to
where you were. Some bankruptcy files will remain on your credit fix
report for either 7 or 10 years. If you have one or more present in
your report, creditors will still review how you managed your credit
after the loss to evaluate whether or not you are still a high risk
individual.
Your focus after bankruptcy then is to start putting positive
indicators right after the big loss. As the bankruptcy file goes
farther into the past of the record, more good accounts should
continue to build up your recent history. Continue learning the
skills and methods to build up your credentials as you wait for new
credit. Examples would be paying bills on time, paying in full and
using credit wisely by staying well below the limits.
More Strategies For Credit Resolution
Most companies may not allow you to get regular credit if your
bankruptcy is still fresh. Credit Tip; Get a secured card instead
which has a limit equal to the amount you deposited to the company.
This works just as well as any credit card but keeps your spending
habits controlled and avoiding accumulation of any debt. Continue
managing the secured card well as the company will evaluate whether
your habits have improved to be eligible for a regular card.
After 1 to 2 years, you may be qualified for a store card. Continue
working on your FICO scores by continuing to move forward with
positive results. Add positive installment accounts once you get a
store card. Make a small personal loan and see how much you need to
pay to get credit or how much credit will be made available to you
based on your current history. Ask for a copy of your credit report
to find out "what is my credit score" from the three major bureaus
(Experian, Trans Union, Equifax) then highlight items that need more
work before attempting a full on credit reports fix.
It is not recommended to apply for a credit card during the first 3
post-bankruptcy years. Use the time to establish good history with
your secured card, store card and small installment account. If you
feel that your record has far outweighed the loss which is
continually pushed deeper into the past, try applying. If you get
turned down, allow all accounts to age for 6 to 12 months then
re-apply. Continue debt repair after bankruptcy and you'll be on
your way to bigger loan opportunities like never before.
