Debt Consolidation Loans

Rebuilding your credit after bankruptcy can seem like a daunting task at first. But remember that in two years, you can have a good credit score. The key is to start small and use credit responsibly. In no time, you will have a good enough record to qualify for low mortgage and car loan rates.

1. Start Rebuilding Credit Score with a Credit Card

After your bankruptcy has been discharged, apply for a credit card. That might seem like the last thing you would want to do. But, it is the only way you can rebuild your credit. Financing companies won’t punish you forever for a bankruptcy, but they need proof that you can handle credit.

Start with a secured card and use it. Make monthly payments. You may decide to pay off the entire balance or only a portion. Keep your account to 20% or less. Larger amounts can hurt your score.

2. Check Your Free Credit Report Online

After six months, check out your credit report. There are several places to get a free copy. With this information, you can check two things. First, you can see the good standing of your new credit card account. It should show payments paid on time. The longer you keep that account, the more it will improve your score.

The next thing to check is that all your old accounts have been properly closed after the bankruptcy. If they remain open, notify both the credit reporting agency and the creditor. Unresolved accounts will unnecessarily hurt your score.

You can also decide to include a letter explaining the circumstances of the bankruptcy. In some cases, this can improve the rates you qualify for.

3. Continue Applying for New Credit Over Time

After six months, open a new credit line. By this time you should be able to qualify for an unsecured card. Use this card and your first card. The same principles of good credit management apply. Keep balances small and make monthly payments.

In another six months, open a third account and use it. In 24 months, your credit should be in good standing and you will have many more credit options.

Here are our
Recommended Bad Credit Mortgage Companies Online.

Carrie Reeder is the owner of ABC Loan
Guide, an informational website about various types of loans.

Tags: money, consolidate debt, get out of debt, bad credit, loans

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Bad credit is a widespread problem in the UK. The number of people filing for bankruptcy is increasing. A bad credit history includes arrears, default, county court judgments, bankruptcy, etc. A bad credit history haunts the borrower for a very long time. It becomes very difficult to obtain a bad credit loan. Even if you manage to get one, the lender will charge a very high rate of interest. You acquire a poor credit score if you default in repayment of a loan or miss out on your regular payments.

Bad credit loans are taken out by borrowers who have a poor credit score and are in an urgent need for money. Lenders are usually reluctant to offer bad credit loans because they consider you as a high risk borrower if you have a bad credit history. There are many lenders who offer bad credit loans, but at a high rate of interest. Therefore, you must compare the loan quotes offered by various lenders to get a bad credit loan at a reasonable rate of interest.

Before taking out a bad credit loan, it is always better to opt for a credit repair. Close down all your unused credit cards. This will prevent you from getting into the debt trouble in the first place. Take out a debt consolidation loan to consolidate all your high rate unsecured loans. Once you repay your debt consolidation loan, your credit score will improve. You can also talk to your creditor and explain him your inability to repay the loan. Your lender might come up with some kind of solution, which will help you improve your credit score.

If you believe that under no circumstance you will be able to repay your loan, then you can file for bankruptcy. Once you are declared insolvent, you will be discharged from all your debt obligations to give you a fresh start. However, this is not as easy as it looks. Your assets may be sold off to pay off your debt. Bankruptcy remains on your credit score for a number of years and you will find it very difficult to obtain a fresh loan during all these years.

Prevention is always better than cure. Try not to fall in the debt trap. Use your credit cards very cautiously and take out loans only when there is an urgent need for money. Take out only that much loan which you can repay comfortably.

The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. He has done his masters in Business Administration and is currently assisting Uk-loan-market as a finance specialist.

For more information please visit http://www.uk-loan-market.co.uk/

Tags: loans, debt consolidation, money, debt, consolidate debt

Popularity: 3%