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Rebuilding Credit After Bankruptcy
I filed Chapter 7 Bankruptcy on November 2019 because my judgment creditors were renewing mynold judgments. I was discharged of my Chapter 7 on April 2020. I started applying for secured credit cards the day of discharge. I got 7 Secured credit cards, two credit builder loans. By the end of 2020, my credit scores were at 680 FICO. Secured credit cards and credit Rebuilder loans are the best to rebuilding your credit scores after bankruptcy
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This discussion was modified 1 year, 5 months ago by
Gustan. Reason: Spelling error
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This discussion was modified 1 year, 5 months ago by
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2 Replies
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The best Secured Credit Card to rebuild your credit is Capitwl One and Discover card. Credit Rebuilder loans that are the best is SELF.INC
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Reestablishing Your Credit Score After Bankruptcy
Getting a decent credit score after a Chapter 7 bankruptcy can be quite tough initially but is achievable with the right. Here’s a clearer approach taking into account your experience:
Timeline and Steps to Reconstruct the Credit
Applying for Bankruptcy:
In filing for Chapter 7 bankruptcy on account of judgment creditors reviving their judgments, you managed to receive the discharge in April.
What to do instantly after discharge:
It is advisable to commence the rebuilding process right after one’s discharge. You applied for secured credit cards on the same day, which is a good practice.
How to get secured credit cards:
You successfully obtained 7 secured credit cards. Secured credit cards are those where cash deposits are placed, which becomes the maximum credit amount that can be borrowed. This enables you to restore your credit history while directing the lender’s risk exposure.
Benefits:
They make reports to credit bureaus every 30 days.
Ability to pay the amounts owed without being late on any payments.
Credit Builder Loans:
Furthermore, secured credit cards were followed by taking out two credit builder loans. As you may know, such loans are available for everybody but specifically targeted at poor credit situations where borrowers desire to improve their credit status.
Benefits:
Payments are made to and reported to credit bureaus.
Supports positive payment history.
Credit Score Improvement:
Your hard work improved your credit score dramatically by the end of 2020, and you attained a rank of 680 FICO points. This also shows that bankruptcy does not mean it is impossible to rebuild credit; it only requires annual effort over time.
Best Practices for Rebuilding Credit
Timely Payments: A positive payment history is created by making timely payments on all credit accounts.
Low Credit Utilization: Employ credit prudently so the credit utilization ratio remains below 30% of the total credit limit.
Monitor Your Credit: It is vital to regularly audit your credit, not only reports but accounts too, for errors or errors that may be more appropriately referred to as unauthorized transactions. Such reports can be obtained at no charge from AnnualCreditReport.com.
Diversify Credit Types: If you feel like borrowing is necessary, you can add collateralized credit in the form of installment loans along with credit cards to display variety in your profile.
Be Patient: Surprisingly, most people are not very tolerant or dedicated to rebuilding their journey. Credit is somewhat like a cactus plant that blossoms over a long time.
Your experience should serve as a template for those faced with bankruptcy, which can be overwhelming and frustrating.
Active participation in the form of secured credit card paper transactions or credit builder accounts allows you to build a credit history as long as you use them. Big improvements come with time and effort. Many people experience this, too.