How to restore credit history after bankruptcy
Do not despair if your credit history has fallen below zero and you have declared yourself bankrupt. If you take the right measures, then a hopelessly spoiled situation can be corrected. ForumDaily detail I told how to get the first credit card and build a good credit history. But if you need to restore your reputation, the path is a little more difficult.
How to restore credit history after bankruptcy, says the portal WikiHow
Open a new checking and savings account
If you still have neither the one nor the other, open one of the two in a local bank or credit union. To choose a bank or credit union:
- Compare interest rates and fees at financial institutions.
- Consider the different services provided by each bank and the likelihood you will need them. A bank that provides many different services that you will never need is not the best choice in your case.
Open a secured credit card (secured credit card)
Each time, saving some money, you can put a part of them on the card. In essence, a secured credit card is similar to a payment card when you pay the bank in advance, but all three major credit agencies are notified of your payments, and your credit score increases.
- Start with about 500 dollars. As the situation improves, you can ask the bank to slowly raise the limit.
- Beware those who require an excessively large initial fee (in some places it can reach 200 dollars) or ask you to call the 1-900 number and the money will be debited from your account.
- Make sure that all three major credit agencies will be notified of your cash transactions. After all, you want them to know that you are repaying your debts, and your debt is reduced.
- Be aware that some banks may keep you waiting for a year after submitting an insolvency petition to get a secured card. If this happens, take care of the accumulation of funds.
- Open a secured card in the bank whose services you intend to use in the future. In time, you may want to change it to an unsecured card, so choose wisely.
Open the buyer's e-card
During the process of issuing a secured card you can fill out an application for receiving an electronic card. When applying, you need to remember this:
- Make sure that all three major credit agencies are notified of your cash transactions. Remember that it is necessary to show them your responsibility for your money.
- Avoid huge initial fees.
- Try to open a card in a store where you will not spend more than one third of the amount that is on the card.
Take a loan to restore the credit rating
Some banks offer a loan to restore credit rating. There is one caveat: you will not get borrowed money until the moment you repay the loan in full. For example, Republic Bank in the USA offers this type of loan in the amount from $ 500 to $ 1500 for the period from 12 to 24 months. The bank sends the money borrowed to you for a special deposit, which you cannot use until you have repaid the entire loan, after which you are free to manage the money.
Pay bills every month
You may have heard that making a balance is profitable for your store, but it’s not. With a bad credit reputation, credit unions will especially want to make sure that you can pay your bills as often as necessary. Buy at the end of the month only what you can afford.
Pay taxes on time
If earlier you sinned by staying with it, now it's time to stop. Write down in the calendar all the payment dates (or put as a reminder in the phone) and follow them strictly. Check in advance whether there is enough money, and make payment by mail or online produce a day or two before the deadline.
- An analysis of the routine to pay your debts will help you get rid of some of the bad financial habits that caused your collapse. Of course, it is worth accepting that it is not easy to do this, but it will be better for your bank account.
Challenge incorrect information in your credit reports
It is necessary to calculate the agency that records incorrect information about your creditworthiness in the report or continues to enter the repaid debt in the report.
To refute the incorrect information in the report, you can fill out the online form in Equifax, loan collateral services page Experian and dispute department in the personal services category in TransUnion.
After a year, go to the unsecured card
If you successfully managed a credit card with a security of more than 12 months, consider asking the bank to change it to an unsecured card.
Most banks will agree to open you a card with small credit rates after 12-24 months. The main thing - and after that avoid unnecessary expenses, otherwise you risk again to be bankrupt.
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