If bankruptcy has been filed, a consumer can begin re-establishing credit with a 321 rebuild right away. There is no need to wait, and in fact, since credit rebuilding can take quite a bit of time, it is best to get started as soon as the bankruptcy has been discharged. Since there is no telling when credit will be needed, it is better to begin fixing it as soon as possible to eliminate hassle when a credit approval is truly needed. There are many simple ways to begin re-establishing good credit history. The most important things consumers can do are applying for a new loan, making timely payments, and being patient.
The first step to re-establishing credit using a 321 rebuild method is to apply for a new loan. This could mean getting pre-qualified for an auto loan. Auto loans have a great impact on credit reports and are one of the best ways to improve a credit score after a bankruptcy. If you are not ready for an auto loan just yet, you can still improve your score using other methods. Opening a credit card is a great way to start getting some positive results.
If you are unable to be approved for a standard credit card, look into getting a secure card. This means you deposit the money that will become your credit limit and then begin charging. Making timely payments will still result in positive reporting to the credit bureaus, which is what you are looking for with your 321 rebuild. It’s important to maintain caution. Do not charge the card to its limit. In fact, keep it at around half of the limit or less. Don’t open multiple cards either; you should stick to 2 cards at first. Make payments on the balance. These can be higher than the minimum payment, but you should not pay the card in full every month. Paying in full does not give creditors any indication of your ability to handle payments. Your score will increase faster by making timely, monthly payments on a card that does not go anywhere near its maximum limit.
Remember to exercise patience while rebuilding your credit. Take a look at your credit report after about 6 months of making timely payments on your loan or credit card. See how much your score has increased already with your 321 rebuild. If you’ve only had the auto loan for the past 6 months, it may be time to apply for a credit card as well. If you already have a couple of credit cards reporting, it may be time to consider the auto loan. But, take it easy for the first year, and add new loans slowly and methodically. The last thing you want is to appear desperate for cash by applying for lots of credit cards at one time. This will lower your score.
Obtaining a vehicle loan or opening a couple of small credit cards can help improve a credit score over time. Be sure to make timely payments every month and be careful with the limits on credit cards. Use patience during the process of re-establishing credit and you’ll see that over time your 321 rebuild has been a success.
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