Obtaining Credit After Bankruptcy: Mission Impossible
While no one wants to think about bankruptcy, sometimes it is simply unavoidable. In some cases, we have tried every avenue we can think of when it comes to fixing our credit, such as debt consolidation, credit counseling and budgeting help, but we just cannot avoid the dreaded bankruptcy. While bankruptcy will certainly damage your credit, you should know that all is not lost. You can still obtain credit after bankruptcy; however, it wouldnt be easy.
Bankruptcy leaves a big black mark on your credit report and, depending on which type of bankruptcy you claim, it may remain there from seven to ten years. Obviously, creditors do look at your credit rating when you apply for credit cards, loans or any form of credit, for that matter. However, having that bankruptcy on your report certainly does not mean its the end of the world for you or your credit.
As hard as it may be to believe, bankruptcy can sometimes be a blessing, especially when you were drowning in a river of debt so deep that you thought you would never again see the surface. But that is not necessarily true and in this article, we will look at some of the ways you can work to obtain credit after bankruptcy.
First, you should understand that, after bankruptcy, you will have to work hard to gain the trust of creditors again. So start with something small, do not jump in and try to obtain a home loan right off the bat. You need to realize that each time you apply for credit, it is recorded on your credit report. This means that each time you are denied it is also noted. As a result, this can hurt your credit rating even further.
Therefore, you should understand how creditors look at bankruptcy. Will you get credit right after you filed bankruptcy? Likely not, but within a year or two years, you may be able too. Why so long? Well, to put it simply, creditors are going to look at your credit report and see if you have any other negative marks between the times you filed bankruptcy and the time you apply for credit. That is why it is so important to make sure that you pay each and every bill you have, on time, every time. This means all payments, your rent, mortgage, insurance, automobile and utilities.
Before extending you credit, creditors want to ensure that you have not fallen back into the same patterns, that you have learned from your past mistakes. A key strategy is to avoid obtaining any credit cards, if at all possible. If you must have a credit card, keep one for emergency purposes only. If you have to use it, make sure that you pay off the balance each time you get a bill and pay the bill on time. This will help keep you from reverting back to the same pattern and try to use cash, if at all possible.
Assuming you make your payments in a timely fashion, it will not take as long as you think and before you know it you will have your credit back on the right track. Hopefully you will have learned from your mistakes and will never again have to consider bankruptcy again. At the end of the day, with proper attention to details and timely payments, you should be able to obtain within a year of two after bankruptcy.
Michael Moody is a successful Webmaster and publisher of Bankruptcy-Question.info. He provides information about various aspects of bankruptcy such as obtaining credit after bankruptcy and other personal finance related topics that can be read on the Internet in the comfort of your own home.
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