Rebuilding your credit rating post-bankruptcy can sometimes seem like an arduous task. However, if you have recently filed for bankruptcy protection, note that there's life after liquidation, and it does not have to be a life where you are treated similar to an economic outcast and expelled to years of credit banishment. In the long run, how well you bounce back from bankruptcy is influenced by the post-bankruptcy actions you take to protect yourself against potential economic meltdown. Here are two main steps to accelerate your recovery post-bankruptcy.
Ask for a savings-secured credit finance from a local banking institution or credit union.
Deposit you next salary pay check, or a section of it, to a banking institution or credit union that affords savings or secured loans. Since you are borrowing against your personal cash, the majority of community financial banks and credit unions will overlook your credit rating. So how does this work? Well, you simply deposit a certain amount of cash, for example, 500 dollars to the bank, in order to open a savings bank account. Then the financial institution lends you exactly the same figure and freezes your savings account, which acts as collateral. Every month as you deposit the loan reimbursements, the repaid amount is unfrozen in your bank account, making it available to you if you need it. By always paying the loan balance in a timely fashion, your credit rating takes a shot up.
Ask for a secured card.
Since your credit is badly damaged, chances are that you won't receive approvals for a regular credit card at the moment. Therefore, your best option is a secured card. With a secured card, the amount of deposit money you bank into a savings account secures you a line of credit. Generally, the credit limit afforded by a secured card is the sum of the deposit money, excluding any charges. The savings account acts as collateral in the event that you exceed your credit card amount, although it's not frozen while you submit payments. If, for example, you obtain a $2000 credit limit, a bankruptcy solicitor may advise you to maintain your balance to approximately $600 or less. Additionally, always repay your loan balance more than the least amount required to further get the most out of your credit upgrading efforts. Make sure that you opt for a secured card that is documented by all the major credit bureaus so that all your timely payments are known to the bureaus.
For more information, contact experienced bankruptcy solicitors in your area.
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