If your financial future has been looking a little less-than-bright since you filed for bankruptcy, you may be wondering if you will ever qualify for traditional financing again. Hope is not lost – there are ways to improve your chances of getting financing again, whether you are looking for a credit card, an automobile loan, or even a home loan.
Check Your Credit Report
Oftentimes a bad debt is still left on your report without a notation that it was included in your bankruptcy proceeding. It is important to check your credit report to rule out the possibility of having a negatively reporting item that should bear this distinctive classification. Remember that there are three major credit reporting bureaus, so check all them all for inaccuracies. This will ensure that you get your fresh start with a clean slate, so to speak.
Improve Your Credit Score One Step At A Time
You did not get to this point overnight, so you must realize that you will not financially recover from bankruptcy the minute your case is discharged. But you work to actively rebuild your credit file from the ground up. It is a frustrating process; however, by utilizing a few simple and proven strategies you may be well on your way to receiving a more appealing credit score within as little as a couple of years.
Fast Way To Add FICO Points
The fastest proven way to add points to your FICO credit score is to obtain and, more importantly, maintain, a credit card. There are lenders who specialize in providing credit cards for damaged credit situations. These cards may be unsecured or secured. The unsecured card is generally less than five hundred dollars, and may have a higher interest rate than a card issued to someone with good credit. The secured credit card has an associated deposit that you make to the issuing bank in an amount that is equal to your credit line.
Use both of these types of cards to your advantage. Never charge frivolous purchases to your card during the delicate rebuilding period following bankruptcy. Use them only for necessities, never exceed usage by more than 1/3 of your available credit line, and always pay them off timely, in full (meaning the entire balance) each month. This practice is the fastest known way to improve your credit score.
Look Online For Automobile Loans
A lot of online automobile loan servicers deal only with those who have just come out of bankruptcy. That means that there is much competition to service your loan. You may pay a higher interest rate, but repaying the loan on time without any late payments will result in positive reporting to the bureaus – in turn, getting you a better rate on your next car purchase.
You Can Own Your Own Home
In less than two years after your bankruptcy has been discharged, you may qualify for a home loan. There are lenders who, like the automobile loan servicers, specialize in putting those who have filed bankruptcy but learned from their past mistakes, into their own home. And many of these lenders us the Internet to both scope out and retain potential borrowers. Most of the process leading up to closing the loan can be done online. With optimal market conditions, lenders often compete for your business online, which can guarantee you better interest rates over the life of your mortgage.
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