How Do You Get Credit After Filing Personal Bankruptcy?

By the time you file for bankruptcy, your credit rating scores most likely have already dramatically dropped. If you have credit, your credit rating score will fluctuate somewhere between 300 and 850 points. 850 is a perfect credit rating and 300 is a very poor rating. To have less than 300, it is said you have no credit history at all. Therefore, your score can drop as much as 550 points, depending on your debt load and debt payment history.

Amazingly, many people find out their credit scores actually might go up a little after the discharge of bankruptcy because their debt to income ratio suddenly drops. Nevertheless, the bankruptcy, which carries a negative stigma to potential creditors, remains on your credit report for up to ten years. It is not so much your credit score that prevents you from getting credit as it is the willingness of creditors to extend you credit. So, how do you get credit after filing personal bankruptcy?

Rebuilding your credit score can often take several years. The credit events that can occur causing you to have to file a personal bankruptcy in the first place are usually severe enough to drastically lower your credit rating scores, and they usually happen over a period of time. Even though a bankruptcy discharge wipes out the debt, the small jump in your credit rating will not compensate for the losses that have already occurred. It takes time to rebuild credit.

There are a wide variety of ways to rebuild your credit, and there are a few ways to expedite the process, for example paying your regular bills on time and in full. Not paying your regular bills on time is the fastest way to destroy your credit rating.

There are some ways to expedite the process of building your credit rating. Borrowing money is the fastest way to build your credit rating, but who will loan you money after a personal bankruptcy? You might be surprised.

Filing a personal bankruptcy is viewed by many creditors as a reasonable response to handling a bad financial situation, and most creditors know you cannot declare bankruptcy again for up to eight years. Therefore, some creditors are willing to risk loaning you money but with a much higher interest rate. For example, there are many credit card companies who will issue you a high interest rate card to get your business. They understand the risks and are willing to take them.

If you get one of their high risk cards, pay them in full monthly, and pay them on time, you will expedite the process of building your credit rating. The trick is not to pay interest or penalties. Both may get you into financial trouble again and paying penalties can cause your credit rating to drop.

Another way to expedite credit building is to use secured credit cards. These are cards backed by the amount of money you have in a bank account. Your limit of liability is no more than what is in the account. Like a debit card, these cards can be used as credit cards. If monitored correctly, the cards can build your credit rating like credit cards.

Most people do not realize that renting is a time honored way to build credit. Some of the reporting agencies are now including rental history in their credit profiles. When you do not pay your rent on time, like any bill owed, the default can hurt your credit score. Now paying rent on time can help your score as well.

Finally, one of the best ways to help expedite your credit score is to monitor the score on a regular basis. Make sure any errors in your credit history are removed. Errors are made all the time and can cause your scores to fall. Removing the errors will help to keep your score moving upwards.

If you need relief from the stress of debt and you live in or around the metropolitan area of Tuscon, Arizona, contact us at .We will help you find a bankruptcy attorney in your who will answer your bankruptcy questions.

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