Posts Tagged ‘how to build credit’

How to Build Credit after Bankruptcy?

If you are looking out for ways on how to after bankruptcy, you have finally come to the right place. However, do not expect a magic wand. All you will get here is information about some basic steps, which if you follow thoroughly and consistently can help you achieve a better credit score. It is true that bankruptcy filing remains on your credit report for around 7-10 years, but there are plenty of things that you can do to nullify its effects. Obviously, it won’t happen overnight. You must have some patience while you are working toward it. It may take anywhere from 6 months to one year or even more before you are able to see some positive results. Having the right approach and consistency in your efforts are the two key factors in this regard. The idea is to demonstrate responsibility with your finances and credit.

Review the Reasons That Pushed You toward Bankruptcy

Once the court declares you as bankrupt, the first thing that you have to do is to sit back and review all the factors that forced you to file for bankruptcy. Before you start developing your strategies on how to build credit, you must be well aware of all those things that damaged it. The reasons could be anything from poor saving habits, lack of insurance, and spending compulsion to bad financial management. The idea is to prepare a list of issues that you have to address and resolve. You cannot afford to make the same mistakes again.

Checking Your Credit Report for Errors

You are already going through the worst credit crisis. If there are errors and mistakes on your credit reports, it will only make things more difficult for you. So, the next step is to check the reports thoroughly. If you find some errors and mistakes over there, you must immediately take necessary actions to rectify the same. You will be able to start off on the right foot only if your credit report is showing correct information.

Get a Secured Credit Card

When it comes to how to build credit, one of the best strategies is to obtain a secured credit card. In this process, you will have to deposit a few hundred dollars into a bank account and request for a credit card, where the maximum limit is equal to the amount deposited by you. As soon as you get it, the credit bureaus are reported about the same. When the entries regarding secured credit card appears on your credit report, it will give a decent boost in your credit score.

Obtain an Installment Loan and Keep Paying off the Same in a Timely Manner

Your credit score reflects your ability to make the repayments on the loans that you have obtained. So, it can be a good idea to obtain some loans up to an amount that you can easily afford to repay. Though it is difficult to get loans after getting bankrupt, but it is not an impossible task. If you do a thorough research, you can find lenders and bank that are willing to offer you car loans and other loans. It is just that they will be charging you a much higher interest rate than usual. You can still go for it, as you always have an option to refinance the same on easier terms and lower rates once your credit improves.

People often wonder how to . But, as you can see, if you follow some basic strategies, you can put your finances back on track even after getting bankrupt, that too, within a matter of just a few months.

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