A few lenders will extend credit to you one day following a bankruptcy discharge. But these lines of credit routinely feature expensive finance charges. Obtaining a loan approval and good rate often requires rebuilding your credit history. Whether you're looking to acquire the best deal on a credit card or qualify for a mortgage, there are several techniques to repair your credit following a bankruptcy.
Get a Secured Credit Card
Repairing credit after a bankruptcy requires obtaining new lines of credit, such as a credit card. Submit a request for a secured credit card with a bank or credit union. These types of credit cards function like unsecured cards. However, due to your bad credit rating, banks and credit unions issuing secured credit cards require a security deposit or collateral before approving a request. Credit limits are equivalent to your deposit. And once you display creditworthiness, your credit card company will likely convert your account to "unsecured status" and refund the deposit.
Good Payment History
After acquiring a secured credit card or other line of credit, consistently submit on-time payments to raise your credit score. A good payment history means making payments on or before your due dates and submitting full payments---no half or partial payments. Unexpected circumstances may occur, wherein you're unable to send a payment. Rather than send the payment late or skip the payment altogether, contact your creditor immediately and ask for an extension or work out a new payment schedule.
Adopt Better Credit Habits
Poor credit habits such as overspending and habitually exceeding your credit limit may have led to bankruptcy and poor credit. Repairing credit after a bankruptcy involves recognizing previously bad habits and learning manage credit better. Along with maintaining an acceptable payment history with creditors, resolve to stop whimsical spending and excessive credit card use. Pay for items with cash. But if you have to use credit, only charge what you can afford to pay off each month.
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