Ways to Establish Credit after Bankruptcy Discharge

 

Ending up in bankruptcy definitely does not sound like a good idea. Of course, who would want to end up in that kind of situation? However, some people have gotten unintentionally caught up in that circumstance.

 

Because of this, they feel that their self-esteem and reputation goes down the drain together with all their property and money. Are you one of those people looking at life after bankruptcy? Do not fret. There is still hope for you.

 

Here are some ways on how to re-establish your credit after bankruptcy:

 

1. Learn how to live within your financial means.

 

First of all, try to evaluate your spending and saving habits. You have to keep in mind that you need to spend your money wisely. Do away with all the things that you do not really need for a living. Purchasing things should not go beyond your comfort range. Always think about the long-term effect of this.

 

2. Open a new checking or savings account.

 

You need a fresh start. You are beginning to repair your bad credit after bankruptcy and you can only do this by opening a new account. Lenders look into this and can see if you are already responsible enough to lend money to.

 

3. Apply for a secured credit card.

 

This is perfect for re-building your credit after bankruptcy. It allows you to open and maintain a savings account that can serve as security for your credit line. You do not need to deposit a large amount of money because you can increase your limit as you go forward. You need to make sure that you pay this on time because most secured credit card companies make reports to credit bureaus and you need this for regaining positive credit ratings.

 

4. You can also get gas cards or store credit cards.

 

If you want to start a new credit line, opt for these types of cards. Of course, you want to re-establish your credit so you pay these purchases as soon as the bill comes.

 

5. Stay away from payday and hard money loans.

 

In re-establishing your credit after bankruptcy, you should definitely avoid these types of loans. Always keep in mind that the interest rates are very high and it could possibly get you back in the quicksand of debt if you cannot pay 50% - 150% interest rate.

 

6. Reaffirm your debts on time or if possible, earlier.

 

In case you want to keep a credit card after bankruptcy, reaffirming should be done. This is made usually after discharge for the reason that it gives you more bargaining