|Posted by Percy A Lowe on March 16, 2013 at 7:00 AM|
Follow these steps to recover from Bankruptcy. Also, you can contact Lowes Financial for help with learning to raise your credit score while you are going through Banlruptcy.
The following tips will help you reestablish your credit after a bankruptcy:
• Once your bankruptcy has been discharged, review your credit reports and make sure that the
accounts you included in your bankruptcy are reporting "included in bankruptcy." Make sure that
any judgments, collections and charge offs are not still showing in collection status. This is
important because you do not want future lenders to think you still have outstanding collections, and it is distorting the amount of debt you actually owe.
• Establishing revolving credit accounts is necessary to building your credit. Six to twelve months
after your bankruptcy is discharged, apply for a secured credit card. Before you sign on the dotted
line, make sure the credit card issuer reports the payments to the credit bureau as a regular credit
card, not secured. A good place to start is www.bankrate.com or www.cardratings.com for credit
card comparisons and rate information. You will need to prepay the available balance on the card,
and there will be application and processing fees, but if you use it sparingly and make your
payments on time, you can ask for an increase in your credit limit every six months, which will help your credit score.
• Make a budget and stick to it. Bankruptcy allows you to get a fresh start so make sure you take
advantage of it. Watch the careless or non-essential spending that may have caused you the prior credit problems.
• If you were lucky enough to keep your house, make sure every mortgage payment is made on time.
This goes for utilities and other payments as well.
• Establish and make regular deposits into a savings and checking account. Make this a major priority.
Checking and savings accounts are both important to have when you're filling out credit applications after a bankruptcy because it proves to potential lenders that you have an established
relationship with a bank. Remember to start your new checking account with as much as you can
afford because with the current cost of overdraft fees, you don't have much room for error. In addition, banks track when you overdraw your account, which can hurt your chances of being approved for other accounts or loans.
• Put off any major purchases for two years if possible. Although you may still find someone to give
you an auto loan with extremely high interest, you are better off waiting until you have raised your credit score.
Categories: Bankruptcy Recovery