What Can I Do To Rebuild My Credit?
Among the concerns of people considering bankruptcy is the fear that they will no longer be able to get credit. They may have been told that they cannot get a vehicle loan, or even a credit card and that buying a house will never be an option.
That is simply not true! With the completion of a bankruptcy your unsecured debt will be gone, giving you an opportunity to improve your credit score without the burden of overwhelming bills. And don’t be surprised when you receive credit card applications in the mail and car dealers send you brochures soon after your bankruptcy case is concluded.
So what should I do to rebuild my credit? Actually, it is fairly simple.
After your case is concluded you will be able to apply for a credit card. You may get a low-limit unsecured or secured credit card. In order to obtain a secured credit card, you must pay a deposit to the credit card company. This is security for the credit card company against unpaid balances. The credit card company will then issue a credit card with a credit line for anywhere from 50 to 100 percent of the amount of the deposit.
In either case, your plan is very simple. Buy a limited amount of groceries or gasoline with the credit card every month and then pay it off. This is probably the best way to rebuild your credit after a bankruptcy case is concluded, and it will put you in a better position for a vehicle loan or home in the future.
If you need a vehicle after your bankruptcy case if completed, you will be able to receive a loan, but the interest rate will be high. By rebuilding your credit slowly, you will see over time that you will be eligible for better interest rates on secured loans. It just takes patience and diligence to pay off your low-limit credit card every month.
In terms of getting a mortgage or refinancing after a bankruptcy, it is going to depend largely on the current economic and market conditions. If you steadily work to rebuild your credit through a low-limit credit card or a reaffirmed vehicle loan, your credit score and your chances for receiving consideration for a mortgage or refinancing will improve as well.
Now that you know you can rebuild your credit after bankruptcy, don’t hesitate to contact Steidl and Steinberg to find out what we can do to help you resolve your debt problems.