When an individual or organization is unable to pay off their dues on financial grounds, they are declared bankrupt. Creditors try to salvage a portion of what the debtor owes them by filing a petition of bankruptcy. However, there are numerous individuals and organizations declaring bankruptcy and leave their creditors with no options whatsoever. Once they have been declared bankrupt, their credit history is the worst affected and have little chance of getting loans in the future. You need to rebuild your credit history. However, rebuilding credit after bankruptcy is not very tough.
Once individuals clear all their dues after becoming bankrupt, they can reapply for credit. There is a popular belief that once a person becomes bankrupt, the person can no longer avail any credit. However, it is incorrect. If all the bills are paid on a regular basis without faltering after bankruptcy, rebuilding credit after bankruptcy is a possibility.
While rebuilding credit after bankruptcy, one should try to avoid creating more debts, as it might spell trouble in the future. It is also suggested that they should not take any loan from finance organizations. If bankrupt individuals have finance companies shown in their credit reports, it considerably lowers their FICO credit-scores, which is not desired at all.
There are other things too that bankrupt individuals should do to be successful in rebuilding credit after bankruptcy. They include:
- Opening savings accounts creates positive signs.
- It is also suggested that opening credit cards after bankruptcy gives an opportunity to bounce back in your credit history. You need to buy goods on credit for a whole month and make repayments of the credit in cash within the due date.
- If there are any debts that the person had before bankruptcy and are reaffirmed, then extreme care should be taken to pay them off in a timely manner.
Labels: Rebuilding Credit After Bankruptcy - Going Bankrupt is Not the End of the World
