Credit After Bankruptcy – How To Get Credit After A Bankruptcy
Establishing credit after bankruptcy is not that difficult. It may take a couple of years to qualify for a mortgage, but you can start building a positive history almost immediately.
You will need to be careful about applying for a credit card or other unsecured debt. There are companies that offer credit cards to individuals immediately after they have gone bankrupt, but they charge very high interest rates and other fees.
A safe solution is to obtain a secured charge card. With the secure cards, you make a deposit for a certain amount. You can use the card for goods and services, as long as you do not go over the amount held on deposit.
Some of the secure card companies report to the major reporting agencies. Others do not. Before you sign up for a card, you should find out if this will help your rating or have no effect on it.
As long as a repossessed vehicle was not a part of your case, you may be able to qualify for a car loan. Before you apply, you should check with the dealership to learn about their requirements. Many dealerships offer a “second-chance” type loan designed specifically for people with past issues.
You want to find out about the requirements before you apply, because whenever you make an application for financing or any kind of charge card, the action is listed as an “inquiry” on your report. The number of inquires you have is responsible for 10% of your FICO score according to the bureaus.
Basically, credit repair after bankruptcy involves establishing a positive history. It is a fresh start, so to speak. Some lenders will be happy to offer you financing, because they know that you cannot go bankrupt again for at least seven years.
You may have been told that it takes seven years before you can establish credit after bankruptcy. That is not always the case. You should be able to get some kind of charge card or automobile financing. If you are careful to make all of your payments on time, then your history will be positive and you will improve credit score ratings.
In just a few years, you should be able to qualify for a mortgage. Although lenders have become stricter about who can and who cannot qualify for a mortgage, a reasonable downpayment and some positive credit after bankruptcy will help you qualify.