Secret To Establishing Credit Immediately After Bankruptcy

by David Roomer
(Florida)

I was able to begin establishing credit immediately after bankruptcy. Like many of you I was dreading bankruptcy due to the stories I had heard about how it would be three to seven years before credit could be established after bankruptcy, however that was not at all the case for me. Almost immediately after bankruptcy car companies began to flood my mailbox with offers. Many car companies love it that a person has gone through bankruptcy because they know you can't do it again for many years. So a car can be bought to establish credit, it is just that the interest will be higher, sometimes much higher, than if you bought the car before bankruptcy. This will allow you to being establishing credit immediately after bankruptcy if you desire it.

Establishing credit is great, but there are downsides you should be aware of. Obviously purchasing a car after bankruptcy is not a decision that should be taken lightly. Make sure that you can make the payments and understand that due to the higher interest you will be paying much more for the car than it’s true value. Some interest rates are so high that you can end up in a situation called upside down. Meaning that the car is worth less than the remaining amount you owe on it. For example over the first year a car tends to depreciate quickly but, since you pay of interest before principle on a loan, you will most likely pay little principle on the loan. Therefore if you were to sell the car in the first year you would most likely own more on the car than you could get for it. Best approach is to only purchase the car if you know that you are going to keep it until it is paid for.

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