At Renae Stucki Realtor we know many people are worried and cautious about bankruptcy and how they’ll get credit again after they’ve had to take one out.  We have a couple suggestions on how to rebuild credit and what to do when you encounter problems based on bankruptcy.

First and foremost, find a credit card you can qualify for.  These cards usually have a high rate of interest and an annual fee.  Sometimes, you can avoid the annual fee by charging enough on the card.  But you want to avoid that if possible.  The best way to use a credit card with a high interest rate and an annual fee is to use it for small purchases and then each month pay the entire balance off before the due date. 

By doing this, you don’t incur interest on your purchases, you can possibly avoid the annual fee and you build credit by using the credit line issued to you and paying it off.  Do not be tempted to use the credit  card for emergencies or bigger purchases.  Use is only as a tool to build your score again.

Another method of rebuilding credit is to take out a loan.  An auto loan is probably not the best way to go.  The interest you’ll pay will be outrageous, but a small personal loan will allow you to pay it back over time and will also reward you handsomely with good credit when you pay it off.  

During the economic recession, a lot of people were forced to file bankruptcy because of job loss or other reasons beyond their control.  When you apply for credit, it’s ok to prepare a letter stating why you were forced to declare bankruptcy and what you are doing to repair the damage to your credit.  This can go a long way to help reassure a lender.  Keep in mind, because of the recession, lending institutions are trying to be more open minded about potential clients and may take into account events happening outside of your control as they consider extended you credit.

Our final tip is tracking your credit score.  If you’ve never done it in the past, make it a new priority and get used to following it.  As you improve your credit, you can follow your progress and eventually, you will know when to cancel that high interest credit card and start looking for credit more suitable to your new and improved score.

If you feel like you’re ready to see where you’re at looking at a mortgage, contact Renae Stucki and we’ll help you see where you’re at and help you plan to get the loan you want for the home you’re dreaming of.  Contact us today!