Going through a bankruptcy is a difficult time. Probably the worst aspect is the ten years the bankruptcy will appear on your credit report. However, if you have gone through this process, you need to know that you have options for credit repair after bankruptcy. Although the road will be somewhat challenging, remind yourself that bankruptcy does not have to be a black cloud that looms overheard. In addition, just because the bankruptcy will show up for ten years, you can still do several things during this time to improve your FICO credit score.
You need to look at your bankruptcy as a fresh start, a time of starting over where you can get your financial life back on track. Although the steps to credit repair after bankruptcy are not anything magical, they are sound and they do work. Remember, right now, you need to focus on your financial present, not so much on your credit history. This article will provide you with some great steps to credit repair after bankruptcy so you can rebuild credit to enjoy the things in life you deserve.
Our first step toward credit repair after bankruptcy is to consider joining a credit union. With this, you become a member, a part of the family of the credit union, not just another customer. Then, open both a checking and savings account at the credit union, keeping good record so these accounts will help you rebuild. Then, when you need to buy a home or car, or perhaps take out a personal loan, the credit union would be a much likelier source than a traditional bank.
Another step to credit repair after bankruptcy is to apply for a credit card. In this case, you have two options. First, you could go with a secured card, which means you open a bank-like account and deposit a certain amount of money in it. Whatever this amount is becomes the available credit on your card. In other words, the bank account is collateral. The other option is to choose a credit card designed to help people rebuild credit such as Orchard Bank or Capital One. Although you will pay higher interest, once you have the card and make regular payments on purchases made, your credit score will begin to climb.
Just as there are things you can do for credit repair after bankruptcy, there are also things you should do. For example, you want to avoid getting caught up in the trap of credit repair firms or agencies. These companies are run by scam artists that will ask for a large sum of money upfront, which is illegal, and then do virtually nothing in return. In fact, most of these so-called credit repair companies will suggest you make illegal steps toward credit repair, making the issue far worse.
Keep in mind that when it comes to credit repair after bankruptcy, some companies are legitimate and capable of helping but you will need to ask a lot of questions and check references. In addition, keep reminding yourself that you will get your credit under control. You will have a chance of reestablishing good credit so you can enjoy a sound financial future. However, be patient and work hard. Although you will not be able to start the rebuilding process immediately, it will come. Typically, we recommend you start about two years after the bankruptcy. This time is ideal for applying for a credit card, preferably one without an annual fee, and perhaps a personal loan.
The process for credit repair after bankruptcy is one that requires you to take small, baby steps. Obviously, a lender is not going to say, “Sure, you’re fine now – here’s a $10,000 loan”. You have to work to rebuild the trust of lenders. A simple credit card with a $300 credit line with payments made on time each month will do wonders for your credit score. As creditors notice you making payments on time and maintaining a workable and acceptable balance, they will begin to increase your credit line and be more willing to extend credit. Soon, you will again be considered a strong candidate for credit!
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