Your ability to reestablish credit after filing bankruptcy is better than it has ever been. After you receive your bankruptcy discharge, you will receive solicitations from lenders offering to finance homes, vehicles and credit cards. Here are some tips on responsibly and successfully reestablishing your credit after bankruptcy:
1. Open a checking or savings account. Lenders may look at this to determine if you can responsibly handle your cash flow.
2. Pay your utility bills and rent on time for at least a year.
3. Apply for store and gas credit cards that you would normally pay cash.
4. Apply for a secured card where you deposit cash and charge against it. Be sure to pay advances back over two months so that they will be reflected as positive marks on your credit report.
5. Look for car dealers and mortgage brokers that attest to be "bankruptcy friendly lenders".
6. Stay away from payday loans that are at high interest rates and are a "bad credit" trap.
7. Live within your means. Do not unnecessarily increase your debt to income ratio by taking on credit to purchase luxury items that you DO NOT NEED. Your payments on consumer debt should equal no more than 20% of your expendable income after costs for housing and a vehicle.
8. Pay your reaffirmed, pre-bankruptcy debts on time.
9. Write a letter to each credit reporting agency explaining the circumstances that lead to your bankruptcy filing.
10. Find a friend or relative to cosign for you on a loan and pay it on time.
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