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.