How Can I Increase My Credit Rating After Bankruptcy?

Nobody likes a pessimist. But somewhere in between is the realist who is totally disinterested...meaning unbiased. I don't know about you but I find the headlines and sub-headlines regarding the U.S. If you had a $100 and suffered a 50% loss or $50. Now to get back to $100 you would need a 100% gain. Nothing from nothing is still nothing. Today's headline "The era of record-low mortgage rates may be over." The fact is that mortgage rates have jumped from 5 to 5.3% in the past week. The $8000 and the $6500 tax credits end in three weeks which remove another artificial prop for home purchasing statistics.

The USDA is out of money to lend to would be homeowners in towns with less than 10,000 population. Another artificial prop gone.

More people are unemployed now than during the big depression. (the percentage may be down but the numbers are not)

In 2009, 5.75% of home loans were "delinquent". It now stands at 8.78. The #1 industry that can lead us to recovery is the real estate market. And, this industry is under assault. Every penny Obama and the congress spend is on a credit card. We must become solvent in order to recover.

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Bankruptcy results when both the creditor (the people lending money) and the person in debt realize that there is no chance of repaying that amount of money back. This helps to alleviate some of the stress because the debtor is not being constantly pursued by creditors and there is a clear payment plan, which can involve some aspects of the debt being wiped.

How does bankruptcy affect my credit rating?

Bankruptcy may seem like an easy way out, but it has a very bad effect on your credit rating, which is why it should only be used as a last resort. A declaration of bankruptcy can remain on your credit files for up to ten years and will bring your credit rating down considerably making it harder to get loans and credit cards as well as pushing your interest rates up. It is important to start building up your credit rating again as soon as possible after bankruptcy.

How can I improve my credit rating after bankruptcy?

Some things that you can do to heal your credit rating are:

• Make your payments on time, late payments will only add to a poor credit rating
  

Taking out a credit card after bankruptcy may be the last thing you feel like doing, but if you take out a secured credit card and use it strictly within your repayment budget each month you will build up a financial history indicating responsible use of credit, which will help to improve your credit rating. It is also worth applying for copies of your credit report from the credit reporting agencies (Experian, Equifax and Trans Union) and checking them for any errors. Although bankruptcy will be listed on your report it is important to make sure there are no mistakes that could unfairly add to a low credit rating. In some locations you may find 'debtor education programs' which will help you to develop strategies for re-establishing a good credit rating. To find out if there are any in your area, or for information on credit counsellings, contact the Federal Trade Commission: ust.cc.help@usdoj.gov / 1-202-514-4100.