Bankruptcy is one of the most difficult experiences someone can go through. There are so many difficult emotions – embarrassment, guilt, and regret.
One of the most important things you can do is keep your eyes firmly looking forward. Yes, it is important to understand what caused the situation, take responsibility, and do what you can to ensure that you don’t end up in the same situation. But then, <b> it’s time to MOVE ON!</b>
Here are some key things you can do to begin rebuilding credit after bankruptcy.
- Get a Bank Account! Ok, this doesn’t technically help you rebuild credit, as your bank account doesn’t show up on your credit report. (Unless, of course it was charged off.) None the less, if you lost your bank account during your financial struggles, it is imperative that you get a new one. You have probably already learned how difficult life can be without one! But how? Many of the larger banks (think Bank of America) may not be willing to work with you. A good step is to try to find a regional bank (Best Bank in Georgia is a good example) that will open a bank account when you have bad credit. Another great option is a credit union. Don’t underestimate the worth of building a relationship with the Branch Manager. And, once you have an account, take care of it!
- Pay Your Bills On Time! This should go without saying, but it is extremely important. Lenders will not be as lenient with small hiccups post bankruptcy as they would have been before. The bottom line: you have to prove yourself all over again and you can do this by paying slow!
- Take Care of Your Student Loans! If you had student loans before your bankruptcy, they are probably still haunting you. Unfortunately, unlike other debts, they are typically not dischargeable. The good news is that you can rehabilitate your student loans! To find out how, click here.
- Get a Secured Credit Card! You most likely won’t be able to get unsecured credit right now, but you can begin to rebuild credit by getting a secured credit card. This is where you will take a certain amount of money and give it to your credit card holder. They will then issue you a credit line in that amount or slightly more. If you can, look for a card holder that will convert the account to a secured loan after a set period of time.
- Get a CD loan! Once you have an established banking relationship, you will want to get a CD loan. Here, you will go in an open a CD with your bank and they will issue you an installment loan in the same amount. This is especially helpful for two reasons. One is that bank loans are especially helpful in raising your credit score. Also, by having a credit card and an installment loan, you now have a “mix” of credit. Showing that you can handle both will help raise your score.
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