Credit After Bankruptcy - Tips To Boost Credit Score

Establishing credit after a recent bankruptcy is very important. For the
most part, many consumers acquire excessive debt because of using credit
irresponsibly. Hence, after a bankruptcy is discharged, many people are
hesitant to obtain new credit accounts.

However, opening new credit accounts is the first step to rebuilding credit.
Low credit scores are common following a bankruptcy. This makes it difficult
to obtain a mortgage, auto loan, etc. Here are a few tips to help you
increase your credit score and re-establish a good credit history.

Understanding the Usefulness of Credit Scores

If you are hoping to make a purchase using credit, credit scores are
essential. Prior to obtaining any sort of credit, lenders must assess a copy
of your credit report. In some cases, lenders simply review your three digit
score. This is practical when approving an applicant for instant credit.
Those with a low credit score are at a disadvantage.

Following a bankruptcy, you can expect your credit score to nosedive. Thus,
it is important to take the necessary steps to improve your credit standing.
Bankruptcy does not last forever.
However, you must put forth the effort to boost your credit and prove your
creditworthiness.

Avoid Repeating Past Mistakes

If bad credit or bankruptcy occurred because of using credit unwisely, learn
from your mistakes and move forward. Many young adults acquire an excessive
amount of debt. In some instances, they do not fully understand how credit
works.

If you are drowning in debt, bankruptcy may be the only alternative. If so,
avoid making the same mistake twice. Sadly, there are individuals who file
bankruptcy repeatedly. However, rebuilding credit takes time. Once you are
on the path to increasing your credit standing, avoid bad credit decisions.

Establish New Credit Accounts

The only approach for establishing new credit is opening new credit
accounts. At first, this may sound scary. However, this maneuver is
necessary to quickly increase credit scores. New credit accounts may consist
of a major credit card, store credit card, automobile loan, etc.

Secured credit cards are very effective and easy to qualify for. These sorts
of credit cards require applicants to have a down payment. However, it's
well worth the fee. Once you have obtained a new credit card, attempt to do
three things: make timely payment, maintain low balances, payoff the balance
each month. By doing so, each month your score will increase. Soon, you will
qualify for an unsecured credit card. Within 24 months, you may also qualify
for a mortgage or auto loan with a comparably low rate..

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