Bankruptcy offers a fresh start to your financial life. It is important to take that opportunity to review your spending habits, set your short and long range goals, and take careful steps to re-establish credit.
How do I know that all of my accounts are reporting that they were paid in the bankruptcy?
It is important that you get a copy of your credit report 2-3 months after your bankruptcy has been discharged. You can get a copy of all three bureaus at www.annualcreditreport.com. You can also obtain a credit report at CCCS and have a certified counselor review that report with you. For more information about the CCCS Credit Report click here.
Because of my bankruptcy I am having trouble re-establishing credit. Do you have suggestions?
Often you are able to qualify for a secured credit card. You will deposit funds with a banking institution and will have a credit limit based on that deposit. You can check to see if your bank or credit union has this type of account. Another possibility would be to become a co-signer on an account with a friend or family member who is opening an account or who has an established account.
I had some accounts that I could not discharge in bankruptcy. How will they affect my credit score?
It is important that you continue to pay them as agreed. If you have student loans try to keep them out of deferment, Do not pay off your installment loans early as your history of monthly payments will be important for your credit score.
I am trying to choose which type of account to open. Will some be more beneficial to building up my credit score?
Generally an all purpose card like a Mastercard or Visa is the most beneficial. You can compare credit card offers at sites such as www.bankrate.com. Secured cards are usually general purpose cards also. Store cards will also build your credit, but generally have a higher interest rate. Loans with finance companies usually have a negative affect on your score and should be avoided. If you decide to get a loan with in-house financing make sure to confirm that they report to the credit bureaus.
I would like to be able to buy a home in the future. Will that be possible since I have declared bankruptcy?
It might be possible in 3-7 years depending on whether there was a foreclosure, a short sale or a deed in lieu of foreclosure. It will be important that you keep your debt to income ratio low, and use credit responsibly. Saving for a down payment will also be essential.