Steps To Rebuilding Your Credit After Bankruptcy


Rebuilding your credit after bankruptcy can be accomplished if you are looking to do so. There are a few ways to do this easily and effectively. Be aware that you should look at all your funds and make sure you can treat your new credit the way it should be treated. You want to take care of this credit so there are no mishaps in rebuilding a solid credit history.

The first thing you can do is to apply for a secured credit card. This will help to rebuild your credit. As you pay on your card they will report to the three credit bureaus. As long as you pay in a timely fashion you will re-establish a solid credit history. Also paying more than the low monthly payment helps in rebuilding your credit file as well. It makes it look like you are on top of your credit and can afford to pay more than the minimum.

Depending on the security deposit you place with the bank issuer will depend on the amount of credit issued to you. Most of these types of cards have a limit of up to $5,000 that can be placed in an account. Your credit limit will match those funds deposited. Of note, do not think just because you have to put up a deposit or you have one on hand means you do not have to pay your bill. It does not work like that. Those funds are to secure your card in case of default, etc. You still need to make payments as you would with a traditional card as it is still being reported to the bureaus. After making timely payments most of these banks will review and possibly convert your account to an unsecured status. If this happens you will get reimbursement for your deposit you put down including any interest it accrued.

Different lenders do different things. Some will look at your bankruptcy as you starting over and will try to help in any way they can. They can do this because they know you are ineligible to file again for years. Others may not be so willing to help. They may look at your filing as you being unable to control and handle your credit history. Do not feel bad about this though. There are those who are willing and able to help you rebuild your credit one step at a time.

After filing and being discharged, there have been some people who were able to go out and buy a vehicle. I do not know what if any amount they had to put down as a payment for said car or the annual percentage rate, but it has been done. So if you are an individual who may need to be able to buy a vehicle for work, etc., it can be done as well. Find a dealer or lender willing to work with you and help you without over extending yourself. Make sure you can comfortably pay for what you get.

If you wait 1-1/2 to 2 years after filing you may even qualify for a home loan. You would even qualify at the rate you would have before you filed bankruptcy. Of course you can check with a home lender for more information about this. Only they can tell you what you would qualify for in your circumstances. Everyone’s financial history is different.

I say to those who think filing bankruptcy will ruin your credit to not think in this fashion. Look at this as a lesson learned and a fresh start. You now know how you came to be in this situation and can hopefully avoid the same pitfalls in the future. If you lived by credit alone in the past, try to pay cash only. Have a credit card for emergencies but do everything else in cash. That way if you have no funds for something then you do not need it. Know what you can afford and stick to that. Do not try to keep up with everybody else. If you stick to your budget you will be fine.

Credit after bankruptcy is totally doable if you know what to do and how to do it. Take care of this new credit because you will not get another fresh start like this for at least 7 years. Look at all your financial obligations and create a budget to live on. Stick to that budget if at all possible. Spend judiciously and protect your credit history in the future.


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