Credit Recovery After the Pandemic

With the pandemic winding down, unemployment subsidies ending, and so many people headed back into the workforce, millions of people are beginning to see a return to a normal life.  Others among us have never not had a normal life.  And yet others have lost nearly everything and find themselves having to start over completely.  If you’re one of the ones who lost your job, your home, your car, or your business, you’re probably starting the process of picking up the pieces, and unfortunately, that is not going to be an easy task.  Even now, as we write this post, the economy continues to suffer – joblessness is still a huge problem, inflation is soaring, and many people find themselves owing back rent in the thousands of dollars.  Where do you even start to recover?

First off, one of the most important things that you can do is simply to figure out where you are in all of this.  Do you have a job?  A place to live?  A car?  How much money do you have in the bank?  How much debt do you have that you need to get under control? If you’re not sure, the best thing to do is to sit down and make a detailed list of what you have, where you are, and where you need to be.  Write down every source of income.  Every bill that you owe.  And make a plan to tackle them, one at a time, over time.

Unfortunately, the debt is likely going to be your biggest hurdle – personal bankruptcies are expected to soar over the next few months to years.  Why?  Because so many of us will simply not be able to recover from the losses incurred during the months of layoffs, lockdowns, and, of course, illnesses.  For those people, bankruptcy will likely be the best option.

But what if you’re able to get a job paying close to what you were making?  What if you are able to catch up over time?  How do you recover from the damage that’s been done to your finances?  To the damage that has been done to your credit score?  To your credit report?

Once you’ve figured out where you are, then you can figure out what you can do.

For example, should you get a personal loan to pay off credit cards?  And if so, which ones offer the best options?  Keep in mind that inflation is soaring, and that means interest rates are going to go up, as well.  So, if you need a personal loan – don’t put off getting this done!

Maybe you need to replace your car but there’s a ding or two on your credit report?  Or maybe you just want to refinance it so you have a little breathing room financially?  If so, investigate those options quickly.  The interest rate on car loans is going up, too!

 

What about your credit cards?  Are they maxed out?  Could you save money on interest if you changed credit cards?

Maybe you don’t have a credit card?  Or you lost yours to bankruptcy?  If so, you can start rebuilding your credit score today with a secured credit card or even a credit card company that works with people who have damaged credit.

The most important thing that you can do right now is to simply GET STARTED on your finances.  Make the calls, fill out the applications, and get yourself back on track to thrive!

Is Bankruptcy Right for You?

With the pandemic sweeping the world, millions of people are facing financial difficulties, so first you need to realize that you’re not alone.  The way that you handle those difficulties will determine whether your next step should be personal bankruptcy or something else.  Especially with recent changes to the economy, many people are literally running out of money and they simply can’t pay everything when there’s not enough money coming in.

While most people are going to avoid filing for a personal bankruptcy at all costs, many will still end up will be forced to do so.  Financial problems are not planned. And yet it happens.

This is something that nobody wants to deal with, but there comes a point when you have no choice. The bills do not just go away.  Learning how to deal with this can help a lot. There are several different types of things that you will be able to do to help you get out of debt without filing for bankruptcy, but this can take years and years to correct. Unfortunately, it takes longer to get out of debt than it does to get too far in debt. This is something that is very important to think about when you are considering bankruptcy.

You’ll likely also feel a certain amount of guilt, but remind yourself that filing bankruptcy does not make you a bad person.  It’s merely a way to get your life back after you’ve suffered a severe financial setback.

 

Bankruptcy & Credit Counseling

Are you one of the millions of Americans now considering bankruptcy?  If so, in most instances, you’ll need to complete pre-bankruptcy credit counseling before AND after filing bankruptcy.  Why are you required to complete it twice?  Unbelievably, the first one is to determine if you even need to file bankruptcy in the first place, or if there’s another way that you can get the fresh start that bankruptcy provides without actually filing.  And the second one is understandably regarding your emergence from bankruptcy and the steps you’ll need to take to keep your future financial life on track.

But let’s talk about the pre-filing credit counseling requirement before you even consider bankruptcy.  Since you’ll be required to take this step anyway, you might want this to be your starting point.  Before you call the attorney and start the paperwork to file.  Pre-filing credit counseling might actually help you prevent filing at all because they’ll help you to figure out if there are other options available.  Perhaps there are significant changes you can make to your household budget, or there’s a debt management plan that you could enroll in, or you may qualify for a personal loan… their job is to help you find these options or, if you’re better off doing so, they may even advise you that bankruptcy is the best option.

Since you’re considering bankruptcy, and it’s typically a requirement, you really have nothing to loose, so why not set up your credit counseling session first?  Not only will the counselor sit down with you and help you to prepare a workable budget, but he or she can actually help you figure out whether you need to file bankruptcy OR if you can avoid bankruptcy and possibly save your credit report from the long term damage a bankruptcy does.

Whatever direction you eventually take, credit counseling is obviously a win-win situation, and one that you seriously need to consider before filing for bankruptcy.

 

 

After Bankruptcy, Remove Incorrect Info From Your Credit Report

Recently declared bankruptcy?  Want to rebuild your credit?  If so, it is essential that you monitor your credit report on a regular basis to ensure that all of the details remain correct. Even if you never intend on buying your own home or a brand new car, having a poor credit score will impact your life in so many other ways. Not only will a bad credit score cost you more for car insurance, or your monthly cell phone plan, but it can also cost you a great job. That alone makes it worth the time and effort it may take to clean up your credit report.

Granted, it’s easy to become so busy that you forget your credit, especially since it’s generally lowest right after you file bankruptcy, but that’s when you should be watching your score the closest!  And, when you find an inaccuracy, it’s the best time to fix it!   Otherwise, this incorrect information could very likely prevent you from rebuilding your credit and cost you even more MONEY.

Generally, the two years following a bankruptcy are actually the best times to begin to re-establish your credit.

Here are the correct steps to take.

  1. Review your credit report thoroughly and regularly. To do this DO NOT use an online company like Equifax in order to view your credit report. Why? You might lose certain rights in order to comply with that company’s own rules (each company is different). Instead, write to annualcreditreport.com and use the MAIL IN form to request your credit report.

Note: you MUST ask for your report in writing. Sure, it may seem archaic, but it’s the only really good way to get all of your credit information and not be taken advantage of by the credit reporting agencies.

  1. Once you have your report, take a good look at it. Since you have declared bankruptcy, all debts that can be cleared should be cleared. Next to any cleared debts the note ‘zero balance discharged in bankruptcy’ should appear. If there is anything else written — anything at all! — make sure to correct that detail. The above statement is the only one that should appear.

  2. If there is any wrong information on your credit report, write directly to the credit agency that has reported the wrong information. One again, it is very important that you do not take the easy road on this and email or call the credit reporting agency, this dispute must be submitted in writing. You cannot submit this information online or through an email because you may not be able to prove your case if they fail or refuse to remove the negative information. Why am I telling you to take the hard way? Evidence, that’s why. When I sue the credit reporting agencies, I need evidence. Without evidence, you do not have a case.

A Long Process

Again, it’s a lot simpler to ask for a credit report online and to submit things online, but this is not what we recommend. Even though it takes a while to submit information or ask for a credit report in writing, this is the absolute best way to go about this process. It’s important that you consider what you might be giving up when you gain information through any kind of private company, so keep this in mind when tempted to ask for credit rating details electronically.

A Qualified Bankruptcy Attorney Can Help

It might not seem like there’s a lot involved in declaring bankruptcy, but a good legal team can do a lot more than plead your case. When you select a bankruptcy lawyer, it’s important that the lawyer you choose helps you decide whether or not bankruptcy is actually the right course for you. In some cases bankruptcy is ideal, but in other cases it’s not the best solution.

Recovering from Bankruptcy

But what can you do to improve your score before the seven years passes?

Even though it may seem impossible, you can actually begin to rebuild your credit almost immediately by working with companies that offer secured credit cards, small installment loans, or catalog shopping accounts (such as a Fingerhut Credit Account issued by WebBank).  Many of these creditors specialize in working with those of us with less than perfect credit, offering special “fresh start” style programs designed to help rebuild credit.  Once you’ve opened such an account, make sure you make your payments on-time, every time, and keep your credit utilization below 30%, and in a few years, your credit score could be as high as 700 or more.

While it may seem like it at the time, bankruptcy does not ruin have to ruin your credit forever, you just have to make sure that you use the “fresh start” that bankruptcy provides wisely by practicing good financial habits and working to rebuild your credit.

Here are a few options to consider when you’re ready to start rebuilding your credit, whether you have a bankruptcy or not:

Think Getting Credit After Bankruptcy is Impossible?

Bankruptcy literally causes your credit score to bottom out, but you can recover from a bankruptcy if you’re willing to work at it.  In fact, if you handle your finances properly after bankruptcy and start rebuilding your credit as soon as possible after your bankruptcy is discharged, you can recover long before the bankruptcy drops off your credit report.  Truthfully, you won’t see an excellent credit score, but you can build your credit up to the point that you can get a credit card, you can buy a car, and you can even buy a house, as long as you’re willing to do the financial work that it takes to get there.

How quickly you are able to re-establish credit and how much you will pay for that credit depends largely on your behavior after your bankruptcy is discharged.  If you immediately start handling your financial affairs responsibly by paying all of your bills on time, not applying for a bunch of credit all at once, and keeping your balances low when you do get credit, your credit score will begin to improve.

Wondering where you’ll be able to get credit after bankruptcy?  Unbelievably, you may begin to get credit card offers even before your bankruptcy is discharged.  Granted, these offers won’t be from the mainstream lenders that offer the best interest rates, but you will receive offers.  Chances are, these offers will be from lenders that specialize in “subprime” credit cards that target those with less than perfect credit, and chances are, the interest rate will be astronomical and there will be fees attached to the credit card they are offering.  You may even be tempted to pay those rates and those fees just to get credit of some kind.  Don’t do it – that’s not the best way to start!  There are other options.

The first, and probably the easiest, way to get started is to get a secured credit card.  Unlike a conventional credit card, a secured credit card is literally secured by a deposit that you pay when you set up the credit card account.  Typically, the amount of the security deposit will equal the amount of available credit that you have on the credit card.  But, there is a huge advantage to a secured credit card – the interest rates and fees (if any) will likely be far lower than a subprime credit card.

Other than that, it will work just like a regular credit card.  You’ll make purchases with the card, get statements in the mail or online, and you’ll make payments on the balance owed.  And, just like a conventional credit card, the secured credit card lender should report your responsible use to the major credit bureaus, thus starting you on the path to better credit.  (If they don’t report to the credit bureaus, you don’t want the card.)

Many secured credit card companies will even convert your account into a conventional, unsecured credit card account after a reasonable period of time has elapsed.  It all depends on the card you choose, so shop wisely and read the fine print!

The other way that you may try to get started on rebuilding your credit is to consider a catalog shopping or gas credit card.  Catalog shopping cards and gas credit cards are typically easier to get than conventional credit cards, but most of these lenders also report your responsible use to the major credit bureaus, so they make good starting points when you’re seriously trying to rebuild your credit score and don’t have a lot of money to put into security deposits and such.

Fingerhut is one of our favorite catalog shopping companies simply because they do work with those of us with less than perfect credit and because they’re pretty competitive in terms of interest rates, merchandise selection and pricing, and so on.  If you haven’t looked at Fingerhut in a while, you may want to look into opening a Fingerhut Credit Account issued by WebBank.

From past experience, we’ve seen lots of people recover from all kinds of credit setbacks, from multiple bankruptcies, repossessions, and more, but the single most important thing that you must remember when you are trying to rebuild your credit after a bankruptcy is that you must be willing to put in the time and the effort that it takes to get it done.

There will be times when it is discouraging… you may find that you’re turned down by some lenders, but there are lenders who will work with you as long as you’re working at it yourself, and the best way to do that is to PROVE your credit worthiness as soon as you can!

A Fresh Start After Bankruptcy?

Looking for ways to get a fresh start after a bankruptcy?

In an earlier post, we talked about using a secured credit card account to start the rebuilding process after a bankruptcy filing, and we went through the reasons why getting a fresh start early on can help speed up the process of re-establishing credit. Another way to re-establish your credit is to open an account with a store/catalog sales site like Fingerhut.

How can Fingerhut help you recover from bankruptcy?

Unlike a lot of store/catalog sites, Fingerhut works with those of us with less than perfect credit and chances are, you may still get approved for Fingerhut, even with that bankruptcy on your credit report.

A Fingerhut account can help your credit in two ways:

  1. Your regular payments will be noted on your credit report, thereby helping you to begin to rebuild your payment history.
  2. Your available credit will be reported as well, and in the event that your credit limit is increased, that will also be reflected. Just make sure that you keep your “available credit” around 75% of your total credit limit, because that is an important factor in calculating your credit score.

And finally, there is another reason to consider Fingerhut – buying power!

Let’s face it, when you have no credit, it’s really hard to buy some things… things that you want or need. Fingerhut offers a great selection of name brand merchandise at great prices, and the prices are listed two ways on their website – the full price is shown AND they show you the monthly payment amount, so you know how much you’ll have to pay each month before you buy.

Think Fingerhut might be the right choice for you?

Apply for a Fingerhut Credit Account issued by WebBank today.

(Trust me, you’ll LOVE the selection & the prices at Fingerhut!)

Getting a Fresh Start After Bankruptcy

Getting a fresh start on your credit after filing bankruptcy can be nearly impossible.

Your credit score bottoms out, typically you don’t have a lot of money on hand, and no one wants to extend any kind of credit to you. It can and will take years to recover, but did you know that there are ways to start improving your credit score as soon as the bankruptcy is finalized?

One of the best ways to re-establish credit after bankruptcy is to open a secured credit card account.

With a secured credit card, there is usually no question whether or not they will open the account – you’ll just need the security (deposit) that they will hold against the account. In some cases, you’ll be limited to a specified credit limit, and in others, you can set the credit limit simply by putting more funds in the security deposit account. Either way, you can apply for and get a credit card relatively fast, and just like regular credit cards, secured cards typically report to the credit bureaus so you’ll start rebuilding your credit right away.

Secured credit cards can help in two ways:

  1. A secured credit card helps you to rebuild the amount of available credit on your credit report. This is a very important part of your credit score, and the more available but unused credit that you have, the better it affects your credit score.
  2. Demonstrating responsible usage of your secured card, including making timely, regular payments, can also affect your credit score in a very positive way. Credit is measured not only by available credit, but by the length of time that you hold accounts, and by your history of timely, regular payments.

Not sure which secured credit card is right for you?

Here are our top picks:

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Bad Credit Does not Mean You Will be Refused Car Credit

A bad credit rating can be viewed as a mountain to climb for those affected by it. Consumers may deem themselves in a position where they are unable to receive any finance from lenders. This is however, not true.

The truth: even with the worst credit, even one day after bankruptcy, an individual with bad credit may still obtain a credit card, a car loan or a home mortgage loan” (Attorney M. Brenner 2008).

Consumers have finance available to them regardless of bad credit as long as they are able to qualify through other requirements. Through fulfilling these requirements, opportunities of car loans or car credit will be made available.

Collateral can be a huge deciding factor when lenders are considering applications. Collateral, normally based upon fixed assets such as property, can be secured by the finance company. The collateral is used, as a source of payment, if a consumer does not make repayments of the full amount within an agreed time.

This does not mean that credit or income requirements will be overlooked by the mere fact of applying for a secured bad credit loan instead of an unsecured loan. However, it is true that you can boost your chances by doing so” (Witts 2008).

Unsecured loans are still available for consumers with bad credit. These loans will be subject to higher interest rates and lower loan amounts but are still a viable option for those with bad credit. Those with bad credit can use co-signatories or guarantors in order to secure loans such as car credit.

This will greatly reduce the risk and thus, ease the requirements for approval” (Witts 2008).

Consumer’s confidence in spending has fallen, effecting large purchases.

“Research, conducted in February, is one of the first pieces of evidence that the public are changing their behaviour to take account of the economic slowdown. Of the factors slowing spending, the biggest, cited by 44 per cent of people, was the rise in the cost of day-to-day living. One in six said they had received some big household bills; had seen their income plunge for another reason; or just felt they should be more careful in their spending”. (Hickman 2008).

Cars can be an expensive one off payment. The current economic climate means that consumers are less confident in their disposable income spending. Therefore the option of spreading that payment over a period of time in manageable monthly sums is more appealing to consumers.

Recent surveys from the RAC have indicated that a sizeable proportion of UK drivers are searching in order to reduce the size of their car. Consumers view the need for a smaller car for two reasons. 1; Cost and 2; maximising their car credit.

Companies such as creditplus.co.uk are specialists in finding consumers potential finance opportunities. They will sort through the major lenders and find the best finance deal available for specific consumers circumstances.

The use of loan calculators and other financial assistance tools provide consumers with an easy way to check if how much monthly payments would be and for how long these repayments would need to be made. However, this would all be dependant on the outcome credit checks carried out.

References

Article Sphere. 2008. Bad credit doesn’t have to be an obstacle. [Online] (Updated on 06 October 2008). Available at: http://www.articlesphere.com/Article/Bad-Credit-Doesn-t-Have-To-Be-An-Obstacle/158438 [Accessed 06 October 2008].

Debt workout. 2001. Introduction to Loan Options For Bad Credit Borrowers. [Online] (Updated on 01 April 2001). Available at: http://www.debtworkout.com/bad_credit/loan_help.html [Accessed 06 October 2008].

The Independent. 2008. Now the credit crunch is hitting home. [Online] (updated 16 April 2008). Available at: http://www.independent.co.uk/money/invest-save/now-the-credit-crunch-is-hitting-home-809603.html [Accessed 06 October 2008].

Article Source: http://www.articlesbase.com/credit-articles/bad-credit-does-not-mean-you-will-be-refused-car-credit-591811.html

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www.visitcars.co.uk

Choosing The Right Credit Cards After Bankruptcy

There is life after bankruptcy and once you have dissolved all your debts and the judge has dismissed the case. In a short matter of months, you will be inundated with offers to apply for new credit cards.

Sounds simple enough – right? Fill out a quick application online, cross your fingers, and push the submit button. Wait a minute. When applying for that new credit card after a bankruptcy, you should know where to apply before just arbitrarily thinking: “Here’s a credit card company. Let’s try this one.” You have to choose the right credit card companies before hitting that submit button.

You will get a lot of credit card offers but the bad news is these are not the credit cards you want. They are vultures ready to pick on the leftover meat.

Do Not Fall Into The Credit Trap Again!
Soon your mailbox will receive a credit card notice from several companies in North Dakota saying you’re preapproved for a new card. Problem is, these cards have annual fees with high interest rates. Or perhaps they want you to pay and upfront fee in order to get your application filled out. There are scams galore but you have to look pass these tempting offers of fast and easy credit. Their tactics are to send out as many letters to vulnerable bankruptcy victims and hope that one catches their bait.

Applying for credit cards after a bankruptcy is important since it’s a second form of identification other than your picture ID driver’s license or passport. Without two ID’s you’ll have problems at most stores.

Here are two legitimate banks/lenders to make application for credit cards. Both welcome new customers because they know that you are fresh out of a bankruptcy with little or no debt remaining, so you’re a nice target. The initial card limit will be less than $1,000 but there are NO upfront fees and if you pay on time, in several months they usually raise the limit. You can make that happen faster by paying more that the card asks for. Once you get your new credit cards, apply at several large retail stores, show them your new bank card, get their card, now you have more ID. Orchard bank and Household bank are two places to apply, so you can restart your credit history.

Focus on yourself and figure out how you will pay off future debt. Getting preloaded debit cards will help you with your spending. Getting credit from department stores will also help your credit as long as you do not spend what you do not have. Apply for secured credit cards as a last resort.

Once you have these cards in your arsenal, let time be your friend and your credit scores will slowly regain its former health.

About the Author:  Derrick Kings invites you to get more information about how to improve your credit scores and what steps you can take to to evaluate your credit worthiness.