- One of the easiest way to improve your credit is to sign up for a secured credit card at a bank that will report the account to the credit bureaus. The bank will require you to make a deposit that it will hold in exchange for access to limited credit. The credit limit is usually equal to your deposit, which prevents you from running up debt you cannot handle. This leaves little risk for the lender, so credit history is usually not a large factor in approval. Once you have proven yourself with steady payments over time, the lender may offer you an unsecured card or you may be able to use the positive history to open a credit account with another lender.
- Vehicle loans are another type of secured credit that is easy to obtain after you have filed bankruptcy. Many vehicle loan lenders will approve your application right out of bankruptcy because they know you cannot file bankruptcy again for eight years. Since this is less time than most car loan terms, the lender has little risk of you not paying than if bankruptcy was still on the table. However, you will pay a higher interest rate because of your credit history.
- If you maintain a positive credit history free of late payments and maxed out accounts, most lenders will offer you a mortgage at a reasonable interest rate two years after your discharge. Some lenders will approve mortgage loans one year after bankruptcy but will charge you additional interest.
- People who file chapter 7 bankruptcy usually do not have large cash reserves and may have been using credit cards and loans to pay for emergencies or other unanticipated expenses. Once you receive a discharge in Chapter 7 bankruptcy, you can put the money that was going to creditors toward savings so you don't have to rely on credit to cover unexpected expenses.
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