Once you make the decision to file bankruptcy, you may feel a sense of relief followed by a bit of anxiety. Whether you have filed Chapter 7 or Chapter 13, it means significant changes to your life and financial future. The good news is that not all of these changes are bad. In fact, it may feel like you are making progress simply because you made the decision to do something about your debt.
Once the bankruptcy is discharged, you will be able to start rebuilding your credit armed with a bit more financial knowledge than you had before. More information about bankruptcy is available here (http://www.zerodownbankruptcy.com/).
Do Not Accept All Credit Offers
Once the bankruptcy is discharged, creditors will start to view your credit history a little differently. Much of the risk that creditors face involves the potential for an individual to file bankruptcy on his or her credit line. However, if you have already filed, they know you cannot file again any time soon. They also know that you are anxious to start rebuilding your credit. You may get plenty of offers for lines of credit, but that does not mean you have to accept any of them.
- Compare Interest Rates – The initial credit offers are likely to be high-interest lines of credit because of your bankruptcy, so it is important to pay more attention to the interest rates while you build your credit back up.
- Avoid Unnecessary Debt – For example, you might get a credit offer from a shoe store that lets you make payments. Yes, accepting that line of credit may help you build your credit again, but since you don’t really need shoes that you have to make payments on, it is not the wisest method to use.
- Understand What Prescreened Means – Many lenders send you offers and tell you that you have been prescreened or preapproved. Then, when you go to accept the offer, they run a credit check to determine your credit limits. Every time someone checks your credit, it takes a few points off your score and may look as though you are desperate for credit.
Learn the Facts About Rebuilding Your Credit
You don’t earn a good credit score just by having multiple credit accounts. What creditors are looking for is the long-term results. They want to know that you are capable of limiting how much of your available credit you use while also being able to make payments on time. This is why it’s wise to open a credit account, use only about one-third of the credit you have available, and keep the account active while making your payments on time. For information about Chapter 13 bankruptcy, click here (http://www.zerodownbankruptcy.com/bankruptcy-lawyer-tampa-florida/Chapter-13/).
Keep in mind that not all creditors report to the credit bureaus. For instance, cell phone contracts used to be a great way to build your credit with something you used on a regular basis, but now they are viewed the same as your utilities.
Please share this post online with anyone who is in the process of starting over after bankruptcy.
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