Contrary to popular misconception, getting credit or loans after bankruptcy isn’t impossible. Although the process may be a bit more challenging than someone with perfect credit and financial history, there are plenty of creditor willing to lend post-bankruptcy. The trick is knowing how to present yourself and what type of loan to look for.
Getting Back On Your Feet
The bulk of damage done to your credit report and financial history is the result of missed payments and delinquent accounts, but the bankruptcy filing will allow you to start fresh with a new chance at strong finances. The most important thing to remember after filing for bankruptcy is getting together a plan to rebuild your finances. This means monitoring your credit standing, shopping around for the best line of credit, staying away from debt traps and securing a positive financial history.
When looking for a loan or credit after bankruptcy, keep two things in mind. First, not all loans or credit accounts are equal. Although you may be offered a line of credit that is quick and easy, it may not be the best at this time. Look for a line of credit with the lowest interest rate, limited annual fees, and favorable conditions such as no penalties for balance transfers or maximum payment allowances. Second, remember that loans and credit after bankruptcy should only be used to rebuild your financial history and not as a source of funding for purchases. If you can’t afford to buy something in cash, don’t put it on a credit card. Loans and credit are tools for establishing yourself as a responsible borrower, which takes planning on your part to ensure your balances remain manageable.