Bankruptcy is often known as the last frontier on the road to financial ruin. But does it really have such a shocking effect on your credit rating? Although, in truth, the credit score can be affected for up to ten year, there are steps that you can take to build your credit rating and use credit, in spite of the information of bankruptcy on the credit report.
Although bankruptcy on your credit report will be taken into account by potential lenders, there will also be discharges – which can be even worse for the credit score than collection accounts. It can be virtually impossible to remove these accounts, as they have in most cases remained unpaid and have a devastating impact on your credit score. These accounts remain on the credit report for seven years, after which time, they are removed from the account.
If you have recently filed for bankruptcy, for up to ten years you will be subject to rejections by lenders in the form of mortgages, loans and credit card offers. By default, consumers who have declared bankruptcy in the past are considered of the highest risk, and even if they are approved for certain offers; they are subjected to the highest of interest rates.
Assets that took you a life time to acquire are liable to be repossessed to cover the costs associated with bankruptcy. You will no longer be able to maintain these assets and they will be removed from your credit file.
If you have filed for bankruptcy recently, one of the smartest things you can do is to make use of a secured credit card. This can be done by providing a deposit to the credit card company that is less than or equal to the credit limit that you’ve been offered, and begin using the card. This way, you can start establishing credit history from the moment that you have declared bankruptcy. Don’t wait to rebuild your credit rating. Waiting for the bankruptcy judgments to be removed from your account will result in you being left with no data. Using secured credit cards will ensure that credit history is developed. Be sure to use the card carefully and wisely, and develop positive relationship with the client. Over time, this could lead to eligibility for a non-secured credit card, even with the bankruptcy.
It is essential to determine the effects of the bankruptcy on the credit ratings, the assets that have been accumulated over time and how the bankruptcy will affect your personal financial situation and plans in the time to come.
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{ 1 comment… read it below or add one }
Great blog, but your blog is focused on loan activities.. ok thnks a lot.. give me some thinks experience from you.
regards