How long it takes to build credit after personal bankruptcy largely depends on what you’re willing and able to do, but with a thorough, well executed, plan you can have an acceptable rating in as little as two years. While your past won’t fall off for a lot longer than that of course, with all of the debt gone and new, positive, history you can really move forward and work towards a new financial life.
The first thing you need to do to get things rolling is check your credit report. Often your old creditors will fail to mark your past debts as being discharged. You do not want them to remain marked overdue–because that on top of your discharges will really drag down your rating. You need to call and tell them to change it, this may take multiple calls (and if the person you’re talking to isn’t responsive you need to ask to speak to a manager).
They’re counting on you being ashamed of your past problems and ignoring the situation. Don’t let that be the case.
Once that’s finally behind you, it’s time to start reestablishing yourself. You need two kinds of history to have a good score, installment payments (like loans) and revolving (like cards). It’s usually easiest to get started with cards.
You can get a secured credit card with upwards of a few hundred dollars. You go to apply for the card and then deposit that money into a savings account, which will work as collateral on the card. After about a year of positive use you typically have the option of moving on to a more typical unsecured option.
As long as you pay this off each month and use it lightly, less than 30% of the limit, this will give you the chance to build up a good history.
After a while, often about a year, you want to look into opportunities to build up some loan history.
So, how long does it take to build credit after personal bankruptcy? It depends on how long it takes you to build up some varied history with some of the methods described here.
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