Restoring Credit Rating Post Bankruptcy
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The fact is, after bankruptcy life changes, and if you want to restore your financial position, there are certain strategies one can use to improve one's credit rating, but these are greatly helped by including them as part of an overall strategy prior to filing chapter 7 bankruptcy.
Tip 1. Creditor's Accounts.
It's important that you understand how your credit score is compiled. It is not just a single agency that gives the rating, but data that the agency receives about your credit position from your creditors. This is analysed and your score worked out.
If you can persuade your creditors, and it doesn't have to be all of them, to stop reporting your credit score with them to the credit agencies, which is perfectly legal, this will have a beneficial effect on your credit rating.
Tip 2. Credit Cards.
For many, credit card debt got them into trouble in the first place. However, to get credit, and improve your credit score, you must demonstrate that you can spend responsibly. As long as you are disciplined and pay off your balance at the end of the month, this will be seen as positive and reflect on your credit rating.
Tip 3. Try a Secured Credit Card.
A secured credit card is a credit card that is limited in its credit limit to an amount equal to a deposit with the card issuer. In other words, you give the issuer a deposit of say $200, and the limit on your card is $200. This may raise the question as to why not just have a $200 cash budget and no card.
Cash spending is not seen by the credit agencies. Credit card spending is, and if you pay the balance every month this will be seen as responsible spending, and your credit rating will improve. In addition, there is no danger of getting into credit card debt again as the maximum limit is covered by your deposit.
Secured credit cards are perfectly legal, but issuers are sometimes not registered with the credit agencies. Always check that your card issuer is registered, otherwise the use of your card will not improve your credit score.
Tip 4. Get Included on a Friend's Credit Card.
Having your name put on someone's card is not the same as using it, and indeed you don't need to. As long as they have a good credit rating, this will reflect back on yours, without even using it! The other thing is that the other person will not be disadvantaged by your poor credit hstory.
Be careful however, because if the other person experiences financial difficulty, then this will have a detrimental effect on your rating, but as long as that does not happen, you will see an improvement in your credit rating.
Article Source: Articlelogy.com
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