Fastest way to establish credit after bankruptcy
by Jayne Martin
(Clear Lake, Texas, USA)
The fastest way to establish credit after bankruptcy is to not lose all your credit. Here is the secret to establishing credit quickly after bankruptcy. Anyone considering or declaring bankruptcy should obtain a credit card without a balance on it and DO NOT USE IT. Do not include the credit card in the bankruptcy and you will be able to use it to establish credit quickly after the bankruptcy. Important that you obtain the card before filing for bankruptcy, do not include it in the bankruptcy and that the card does not have a balance on it. Therefore recommend that you either apply for a new card and never use it, transfer the balance to another card or pay off the balance on an existing card.
After the bankruptcy is complete, then charge normal expenses on the credit card such as gasoline or groceries and pay the balance off in full every month. Paying the balance off in full every month is very important. This is how you will gain the trust of lenders that you have the ability to pay your bills. If you do not pay the balance in full, and start to carry a balance from month to month, that will show that you are unable pay your monthly bills and are not a good candidate for additional credit. Therefore do not charge anything to this card that you are not positive you will be able to pay off in full.
Establishing this card before declaring bankruptcy and using it wisely after bankruptcy will greatly shorten the time frame required to reestablish your credit. The hardest part of recovering after bankruptcy is establish credit again, this normally takes three to seven years therefore using this approach will provide a great head start.
There is another more serious reason to obtain a credit card before bankruptcy and that is it could be a long time before you are eligible to obtain one again. I filed for Chapter 13 bankruptcy over a year ago and still have not been able to obtain any other credit cards. You would not believe how difficult it is to do things without a credit card. Try buying something on the internet, renting a car, purchasing a plane ticket, etc. without a credit card and you will understand. Although three to seven years to establish credit may not be forever, it sure can seem like an awful long time.
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