A bankruptcy will stay on your credit report for ten years. However, if you demonstrate responsible credit habits immediately after the bankruptcy, you will greatly improve the odds of getting the credit access you need at affordable rates. A bankruptcy is certainly a negative item and it will affect your credit report but it becomes less important over time particularly if you can prove you now have good credit habits
Getting a positive item posted to your credit report is as easy as getting a personal loan from your bank. Sound like a crazy idea? Not really, all you have to do is explain to your loan officer what you are trying to do and how the bank will benefit by giving you a loan.
Now that you no longer have monthly credit card and loan payments, make it a priority to save $1000 as fast as you can. When you've reached that cash goal, go to the bank where you have your checking account and ask to see a loan officer. Explain to him or her that you want to get a positive item on your report and you would like to do that by taking out a $1000 personal loan and offering a $1000 Certificate of Deposit as collateral.
So now the banker is faced with an application for a six month $1,000 personal loan secured by his bank's own CD for $1,000. By granting the loan the bank sells a CD and earns interest off the loan itself. It is an easy decision for the bank.
Use the $1000 from the loan to open a savings account and use that to pay back the loan. Your credit report will almost immediately show the bank loan which by itself is a good thing. Using the savings account, pay back the loan on time each month for the term of the loan. Now you have a new account with timely payments and all it has cost is the interest on the loan.
If your cash flow allows, you may want to repeat this process once the loan is paid back. Also ask your loan officer about a secured credit card. If the bank offers that service, read the terms and conditions carefully to insure you understand the fees and limitations of the card. Make sure they report it to the credit reporting agencies as a standard credit card rather than a secured card.
These are small but necessary steps in rebuilding your credit after a bankruptcy. You'll discover, providing you pay your bills on time, that your FICO score will improve dramatically over the first 9 months as it projects your behavior based on a responsible history, not just the bankruptcy.
Getting a positive item posted to your credit report is as easy as getting a personal loan from your bank. Sound like a crazy idea? Not really, all you have to do is explain to your loan officer what you are trying to do and how the bank will benefit by giving you a loan.
Now that you no longer have monthly credit card and loan payments, make it a priority to save $1000 as fast as you can. When you've reached that cash goal, go to the bank where you have your checking account and ask to see a loan officer. Explain to him or her that you want to get a positive item on your report and you would like to do that by taking out a $1000 personal loan and offering a $1000 Certificate of Deposit as collateral.
So now the banker is faced with an application for a six month $1,000 personal loan secured by his bank's own CD for $1,000. By granting the loan the bank sells a CD and earns interest off the loan itself. It is an easy decision for the bank.
Use the $1000 from the loan to open a savings account and use that to pay back the loan. Your credit report will almost immediately show the bank loan which by itself is a good thing. Using the savings account, pay back the loan on time each month for the term of the loan. Now you have a new account with timely payments and all it has cost is the interest on the loan.
If your cash flow allows, you may want to repeat this process once the loan is paid back. Also ask your loan officer about a secured credit card. If the bank offers that service, read the terms and conditions carefully to insure you understand the fees and limitations of the card. Make sure they report it to the credit reporting agencies as a standard credit card rather than a secured card.
These are small but necessary steps in rebuilding your credit after a bankruptcy. You'll discover, providing you pay your bills on time, that your FICO score will improve dramatically over the first 9 months as it projects your behavior based on a responsible history, not just the bankruptcy.
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