Guest Post Written by Mesa, Arizona Bankruptcy Lawyer, Samuel Woodruff
While there is no quick solution to getting your credit back on track after filing bankruptcy, there are a few things that you should do.
The first year after filing bankruptcy will be the most difficult, and you will most likely not be able to get any new credit. The most important thing to do is to make sure that you pay all your bills on time. Creditors like to see that you have paid all your bills on time since you filed your case.
Another important thing that you can do during this time is to get a secured credit card. A secured credit card is a good way to begin to rebuild your credit. With this type of card, you give the issuer of the card a set amount of money, usually minimum is $500. The issuer will hold that money and then issue you a card that has a limit equal to the amount that you gave the issuer.
For example, if you give the issuer $1000 the company will issue you a card that has a spending limit of $1000. The issuing company will hold that $1000 as collateral to ensure that you make the required payments on your credit card. If you decide to close the credit card then the issuing company will give you your original deposit back as long as you have paid the card balance in full. You can find a list of secured credit card issuers on bankrate.com.
The credit card issuing company will also report your credit card payment history to all three credit bureaus. As long as you make timely payments, the secured credit card will help you rebuild your credit history. Secured cards are great for people who have filed bankruptcy because you do not need any credit at all to be accepted.
Potential lenders also like to see a steady income. While not always possible in a weak economy, if you can maintain steady employment, this will look positive to potential lenders.
After the first couple of years, you should begin to be able to get some credit again. Most people are able to get car loans and normal credit cards again, but at slightly higher interest rates. The higher interest rates will go down as time passes.
Three years after filing your credit should really start turning around. Most people are even able to get a FHA mortgage loan at regular interest rates. While a bankruptcy will remain on your credit report for seven to ten years, many of the negative effects will begin to fade away after three years.
Restoring your credit will take time, and there are no quick fixes. But a few things will help you restore your credit a little quicker. Make sure you pay all your bills on time and in full, get a secured credit card, and maintain a steady job. These steps will help you get back on track.
Many thanks to Mesa, Arizona bankruptcy lawyer, Samuel Woodruff, for this guest post. Sam’s post is full of great information and ties in nicely with my recent post, “How Long Will Bankruptcy Screw Up My Credit.” Sam’s post is a great “part two.” You need a long-term approach to your financial problems. Stay focused, and you’ll get the benefit of the “fresh start” the Bankruptcy Code is all about.