How to Restore Credit After Bankruptcy
Restoring credit after bankruptcy can help a person to start over with a good credit rating. While many lenders will not give credit to someone who has a bankruptcy on a credit report, there are some ways to help rebuild credit. The person should make sure to not fall into the same habits that caused the bankruptcy to occur.
- Contact a local bank to meet with a credit officer. Inform the officer that you want to rebuild your credit after a bankruptcy. Open a savings account at the bank to use as collateral for a secured credit card.
- Complete the necessary paperwork with the credit officer to establish the secured credit card account. Deposit the funds into your savings account to cover your credit card. You will not be able to withdraw funds from the savings account until the bank decides you are an acceptable risk or you close the credit card account.
- Use the credit card and pay the bill on time each month. By showing the bank that you can manage your finances, eventually you may be able to qualify for a loan to buy a car. By putting down a large amount on the car purchase, you will make it easier for the bank to grant you a loan.
- Ignore credit card offers that you get in the mail from other companies. If you start to run up credit on other cards, you risk running into the same problems you had in the past with funds management. Wait until you are confident in your ability to repay before trying to get any credit other than what is necessary.
- Open a small department store credit card after you handle your secured credit card and car loan payments in a timely manner. Continue to rebuild your credit by showing creditors that you are responsible with your debts. Avoid overcharging for unnecessary items so you can keep your credit rating at a high level.