Loans And Credit Cards Following Bankruptcy

When you have your bankruptcy discharged, you will need to start rebuilding your credit right away in order to deflect some of the damage that bankruptcy does to your credit file. And while you will not qualify for major loans right away, like a home loan, for instance, you can get smaller loans and credit cards within the first six months or so after your bankruptcy is over.Credit Cards Useful Credit Rebuilding ToolsOne of the fastest proven methods of raising your credit score after bankruptcy is to open one or more secured credit card accounts. A secured credit card issuer requires that you deposit an amount of money that equals the credit line that you wish to have; this money is held for a period of time in order to allow yourself to establish credit, and is usually around a year or more. You will have use of the credit card and the money that you deposited, but you will have a regular monthly credit card bill and statement.These types of credit cards report either monthly or every three months to the credit bureaus, so the more of them you have, the better – although you do not want to get more than three secured credit cards at one time. Pay on your secured credit card as agreed, and do not exceed your credit limit. Most credit card companies that offer secured cards will offer better cards later on down the road that are not secured – if you show them that you can manage your secured card well. Look for unsecured cards that charge very little interest on your running balance, and that have no annual fees or account fees.Small Personal LoansYou should also look into taking out a small personal loan, even if you do not have a need to borrow money right away. You can always take the money that is borrowed and place it in an interest-bearing savings account. The point of taking out a small personal loan of less than $5,000 is to have the points that are derived for your credit file when you take the loan out and pay as agreed. Many lenders specialize in writing short term loans of less than $5,000 to those who have recently been discharged from bankruptcy, and although you will pay more interest, you can really use the boost to your credit record, so consider any interest paid as money well-spent towards repairing your credit.Automobile LoansThere has never been a better time to take advantage of automobile loans than after bankruptcy. Nearly everyone with a good employment record that reflects your positive work ethic can qualify for a post bankruptcy automobile loan with just a regular down payment. If you have been looking to buy a new car, then most people are approved shortly after bankruptcy discharge. Most automobile loan servicers see the vehicle itself as security for the loan, so it makes sense to them to finance you a car, even if you have had bankruptcy on your credit record.The most important thing to remember about post bankruptcy loans and post bankruptcy credit cards is that paying on time, each time a payment is due is crucial. One missed payment can cause any positive effects you have had on your credit record to be overshadowed by negative indications that you are not a good borrower. Always pay on time and you will see your credit score elevate.