For many people who file bankruptcy, being in unmanageable debt causes so much anxiety that by the time they file they experience a sense of relief. Bankruptcy can give you a clean slate and a break from insurmountable debt, allowing you to begin rebuilding your savings while taking control of your financial health. Unfortunately, bankruptcy can also have a serious negative impact on your credit, which will need to be addressed in a proactive way. Here are three tips for repairing your credit after bankruptcy.
Apply for an Auto Loan
Getting an auto loan when you have bad credit may be easier than you think. Many dealerships and lenders actually reach out to those who have recently filed bankruptcy, since you no longer have an excessive amount of debt and lenders assume you will therefore have an easier time making your auto loan payments.
Auto loans for people with bad credit can actually help you repair your credit sooner, as long as you make your payments on time. Your interest rate may be on the high side, but after several months of on-time payments your credit score may improve enough to refinance the loan at a lower rate.
Get a Secured Credit Card
While making your auto loan payments promptly each month, you can turbocharge your credit rebuilding by applying for a secured credit card or personal loan. You will first need to save a small amount of money, usually a few hundred dollars, which is used as collateral for the loan. You can then charge a small amount each month, pay it back in full when you get your statement, and in this way rebuild your credit. Eventually, you can close the account and get your secured money back, so this is a very low-risk way to rebuild your credit.
Stay on Top of Your Credit Report
Inaccuracies on your credit report after bankruptcy can cause further damage to your score. Some accounts that were closed in the bankruptcy may mistakenly show up as still being delinquent, which unfairly damages your credit score even more. For this reason, it's important to request your free credit report once a year. If you notice any discrepancies, report them right away so they can be removed and give your score a boost.
Filing bankruptcy doesn't have to mean that your credit stays damaged in the long run. Following these tips will get you on the right track to repairing your credit score, sooner than you may think.
For information about bad credit auto loans, contact a local company.
Share25 March 2018
After going to my first auto auction, I became very interested in how dealers select the cars they're going to put on their lots. I spent a lot of time talking with local dealers, auction regulars, and others in the industry to learn the behind-the-scenes secrets to picking out the perfect auction cars and getting them lot-ready. I created this site to help others understand what goes into the process in the hopes that it would help car buyers understand what they're looking at when they hit the car lot. I hope the information here helps you better prepare for buying your next car.