Bankruptcy

Some Proven Ways To Fix Your Credit After Bankruptcy

There are plenty of things that you need to work on if you seriously want to fix your credit after bankruptcy. When a person is declared officially bankrupt by court, his or her credit rating takes a major hit. You need to inculcate better credit habits and implement some quick actions in order to get your credit back on the right track. The key to success lies in how financially disciplined you are and whether you are using the right strategies. You will find the following information very helpful in this regard.

Bounce Back With A Secured Credit Card

A proven way to bounce back successfully is by using a secured credit card. Though it is very difficult to qualify for an unsecured credit card after bankruptcy, you cannot say the similar thing for a secured credit card. It can help you fix your credit after bankruptcy in a very easy, safe, and effective way. In order to qualify for it, you just have to make a certain amount of money as security deposit. This deposit becomes the maximum limit that you can spend using that card. It means there is no risk of exceeding the maximum limit. That is the reason why it is the safest way to rebuild your credit score after bankruptcy. Another good piece of news is that you can qualify for at a comparatively low rate despite the very fact that you are bankrupt and have a poor FICO score. Just make sure that you keep on making the monthly payments in a timely manner. If you show good financial discipline, you will definitely notice a significant increase your credit rating within a matter of just six months.

Diversify Your Credit By Getting An Installment Loan

You can take an impressive step ahead while you are working on your strategies to fix your credit after bankruptcy by getting an installment loan. Now, you have two types of debt accounts in your name – a secured credit card account and an installment loan. This diversification of credit plays a very important role in determining your credit rating. But again, the same condition applies here also. This strategy will help you enhance your credit worthiness only if you do not make any default and keep on making the payments on the loan in a timely manner. If you keep on missing the payment deadlines, it will further damage your credit score.

There are certain debts that are not discharged under bankruptcy, such as student loans. The laws also provide you the legal right to retain some of the debts voluntarily. For example, many times debtors prefer to continue with their mortgage in an effort to save their home from the claws of bankruptcy. Now that you are trying to fix your credit after bankruptcy, you must take care of those debt accounts properly, which means you must make timely payments toward them also.


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