Archive for the ‘debt’ Category

Posted on November 29, 2009 - by admin

Obtaining Credit After Bankruptcy

Most people assume that if they have to file bankruptcy they’ll never be able to borrow money again for a long time. While it is true that you won’t be able to just run out and get a loan after filing for bankruptcy, you can generally get a loan within just a few years.

Filing for bankruptcy destroys any trust that your lender had in you. And, to be able to borrow money again, you’ll need to work on re-building that trust. You will have to keep all of your bills paid on time and establishing a checking and savings account can work in your favor as well.

One of the best ways to start out with new credit is to build up a savings and place that savings up as collateral on a small loan. Once you’ve repaid the loan, take out another loan for a larger amount. But, you will need to make sure that you don’t miss any of the payments in order to get a positive credit rating.

You should also carefully access the reason as to why you needed to file for bankruptcy. In most cases, the reasons for filing are events that are beyond the persons control. But, if you needed to file for bankruptcy because of careless spending habits, you’ll need to change your spending behaviors to establish good credit again.

Posted on May 25, 2009 - by admin

How Debt Consolidation Affects Your Credit Score

Many people that have considered debt consolidation as a way of getting out of a financial crisis have wondered how it would affect their credit score. The truth is that in most instances it will greatly increase your credit score and will not hinder you in anyway from obtaining a loan in the future which you might need later on for a housing project or a life insurance plan.

When you consolidate your debts you’re literally just paying them off earlier than is required by the lender. You’ll still be paying the exact amount that you owe the lending institution, so the payment will result in a positive rating on your credit score.

However, there is one thing to consider when calculating any affects on your credit rating. A small percentage of your rating is based on the length of your credit history. This category actually makes up for about 15 percent of your overall score.

Even if you’ve made every payment on time, if you’ve got a short credit history, this can affect future loans. To avoid this problem, some experts advise that you pay the balances off on your credit cards, but keep one or two of your oldest accounts open. This will help you retain the length of your credit history and still eliminate the actual debt.