When you file for bankruptcy, a lot of people will tell you that re-establishing credit will take years. They'll also warn you that you'll be unable to buy anything on credit for a long time, and that your credit history will be permanently damaged.
These warnings are FALSE.
The truth is, if your bankruptcy is discharged, re-establishing credit can be done in as little as twelve months. As long as you know how the US credit system works, you can restore your credit quickly and painlessly.
1. Put you house in order.
You want to create a budget and make a savings plan. It's very important you come up with a savings plan that you're going to follow. You also need to make sure that any creditors who send you collection notices are taken care of right away. You can't ignore these notices just because they're for debt that was included in your bankruptcy. Contact the creditor and make sure they know so they don't file a new collection and stop the re-establishment process. Last, make sure you know why you filed for bankruptcy and how you're going to make sure it doesn't happen again.
2. Start hoarding cash and saving paperwork.
While saving a couple of months salary is probably the hardest part of the process, you need to have an emergency cash fund. Besides, you'll need cash for a down payment and secured credit cards. You also need to save all of your important financial documents like pay stubs, bank statements, and bankruptcy documents. Keep them in a safe place because you’ll need them to show creditors in the future.
3. Time for a secured credit card.
A secured credit card is an excellent tool for re-establishing bad credit. First of all, as long as you have enough cash for a deposit, you can get a card. Secondly, they're considered credit and they'll help you build some positive credit history. But whatever you do, don't carry a balance on your new secured credit card and don't use it more than once. In fact, you want to use the card one time and then cut it up. That way, you'll still be getting credit and your credit report will show that you're a disciplined credit user.
4. Buy an inexpensive pre-owned car.
I know that the idea of buying a cheap used car (2-4 years old, less than $10k) may not get your motor running, but remember the goal here is to re-establish quickly. You want to make a few payments on this car (6 to 12) and then trade it in for something nicer. Just make sure you have a down payment before you go shopping.
5. Apply for more credit.
Now that you’ve bought a car and you have a secured credit card, it’s time to get some unsecured credit cards and to start working with a local credit union. Apply for the Discover card, any Visa or MasterCard (as long as there isn't an annual fee), or any credit card offered by your credit union. Most importantly, if your application for a credit card is denied, call and ask WHY. Because most applications are denied by computer, you can often call and get a denial overturned.
6. Buy the car you want.
You've done all the steps, a year or so has passed, and your credit is officially re-established. Trade in that cheap car you bought in step four (unless you like it of course) and get something that you want with the benefit of having good credit.
Some things to consider as you re-establish. First, saving money is an important life skill. As long as you have savings you don't have any financial problems. Follow a budget, think before you buy anything, and don't put yourself in a position where you can financially fail if something goes wrong. Finally, remember what caused you to file bankruptcy and make sure you don't repeat it.
http://www.bestnichearticles.com/Article/How-to-Get-a-Car-Loan-After-a-Bankruptcy/84499
