Filing for
bankruptcy has become commonplace.
In years past, bankruptcy was a huge no no. Now, many Americans face
bankruptcy yearly without even bating an eye.
Some of the most common reasons for
bankruptcy include loss of work, sickness, or a loss in monetary
resources. When people are not in a position to pay off their debts, or
make the proper payments, U.S. Federal laws are very merciful.
In many
cases, the debts are forgiven. This sounds like an easy thing to do,
but it isn’t suggested. Bankruptcy can tarnish your credit
report for up to ten years. In addition, all the bills that were voided
by your bankruptcy claim are considered taxable income.
It is not so easy to for someone who has
become bankrupt to receive another loan. But there are some credit card
companies that will allow charge cards. When you apply for a credit
card after a bankruptcy, they will go through the same motions to see
if you qualify for a line of credit.
They will notice that you have
been a high risk to other companies, but interestingly enough, you will
not be a risk to them for at least eight years (that is when you can
file for another bankruptcy). You will end of having a higher interest
rate, but you will still have credit available.
Instead of going for high interest lines of
credit and lower limits, it is a better idea to raise your credit score
so you can qualify for a bigger loan. Here are some ways you can raise
credit score after you have claimed bankruptcy:
1. If at all possible, get a credit card
with a higher credit limit. If you can obtain a card like this from a
renowned bank, this will help your credit score. It will be easier to
obtain one from a smaller bank, but it won’t have the same
effect on you credit report.
2. Once you have a major credit card, use it
wisely. If you
aren’t making your payments on time, you have ruined your
last chance to raise your credit score after a bankruptcy.
If at all
possible, make the full payment at the end of the month. This will keep
you away from the high interest charges and will help you build your
credit.
3. Keeping your debts small is the next best
thing you can do to raise
your credit score. This will also improve your available and spent
limit ratio.
Bankruptcy is a difficult thing to go
through, but there are ways of pulling yourself out of it financially.
It is a good idea to get some guidance while trying to repair your
credit from a consulting agency. This will cost a little bit of money,
but it will most likely be worth it.
Even though it is difficult to raise your
credit score after you have claimed bankruptcy, it is still possible to
do.