Bankruptcy - Getting Your Credit Back

By Michael Russell
Tip! Once you find a lender, ensure that you complete their application form, thoroughly. Remember that you are competing with other applicants, who have excellent credit scores.

Your bankruptcy case has gone through and you're trying to put all of this behind you. You want to get a fresh start and not make the same mistakes again in the future. It's time to start thinking about rebuilding your credit.

No matter what caused you to file bankruptcy, be it from doctor and hospital bills, a divorce, a loss of your job, or perhaps even your own foolishness, you're going to have to start over again. You will need to prove to lenders that you are a good risk. This is going to take some time and effort on your part, but it can be done. Here are some good tips to help you get started rebuilding your credit after a bankruptcy.

Getting New Credit

Many people mistakenly believe that if will take 7 years after your bankruptcy before you can ever get any kind of a loan or credit card again. This is completely false. Did you know that many people come out of a bankruptcy with higher credit scores than they ever had in their financial life?
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There is no real big secret to this. These people began paying their bills on time again. And they did it consistently month after month. To help begin rebuilding your credit you should consider getting one credit card as quickly as possible, even if it is a pre-deposit credit card. Many credit card companies will give you a credit card after a bankruptcy. You just need to do some searching.

Then make a few small charges to it and pay it off every month. Do not carry a forwarding balance. Simply pay it off every month. This will help rebuild your credit faster than anything else you can do after a bankruptcy. It shows lenders that they can trust you again. Then slowly begin building up to higher purchases and pay those off in a couple of months. Never only make a minimum monthly payment.

Pick Your Debts

Get a credit card to use at your local gas station or grocery store. Then begin using it instead of paying cash. Take the cash to cover these purchases and sit it aside. At the end of the month take the cash and pay off the credit card statement. This will go even further towards rebuilding your credit after your bankruptcy.
Tip! Avoid making late payments. This is primarily due to the late payment fee that will be applied to your account but also because every late payment will count as a point against you in your bid to get a higher credit limit.

By following these steps you're going to be in a position of being able to finance a new car or home within a couple of years. You first just have to show you can be trusted to pay off your debts every month. Then you're showing you're responsible and you'll be able to make bigger purchases.

Insurance

Most all credit card companies offer insurance to cover your monthly payments in the event you lose your job. Be sure you take advantage of this insurance. If something unexpected does occur, then you're covered. Don't take any unnecessary chances with your financial future. You don't want to put yourself in the same situation as you did before. The cost of this insurance is very low.
Tip! Once you have the card, do not max out your credit card. Try not to exceed 70% of the credit card's limit.

Michael Russell

Your Independent guide to Bankruptcy