Rebuilding Credit After Bankruptcy


It is easier than ever to rebuild your credit after bankruptcy. In fact, after receiving a discharge, most people start to receive solicitations for credit cards within a few months. Today, creditors understand that most people who have filed for bankruptcy have learned valuable lessons on how to handle debt responsibly, and have no credit card, installment, or other unsecured debt. Therefore, such individuals are generally good credit risks. In addition, creditors understand that it is not possible for a person obtaining a bankruptcy discharge to file again for many years.

Following are some of the things you can do to restore your credit standing as fast as possible:

Pay any reaffirmed, pre - bankruptcy debts on time;
 
Write a letter to each of the three major credit reporting agencies explaining the reason you were required to file. You have the legal right to provide an explanation, not to exceed 100 words;
   
Never use payday loans. The interest rates are extremely high;
   
Obtain two secured credit cards issued by banks that report your credit history. Some banks don’t, so be selective. Make small charges on them every month. Never charge more than 50% of your credit limit;
   
After six months, apply for only one store issued credit card. Use it every month for at least one year for small purchases and pay off the balance each month. Never charge more than 50% of your credit limit;
   
If your application is denied, apply for another card at a different store at least sixty days after receiving the written rejection;
   
After twelve months, apply for a second store issued credit card. Use it every month and pay off the balance each month. Again, never charge more than 50% of your credit limit;
   
Obtain your free credit reports from AnnualCreditReport.com;
   
Carefully read Free Credit Repair; and
   
Do not use cash or money orders. Creditors want to do business with people who use checking accounts responsibly.
   

 


 

 

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