Bankruptcy is just one of many reasons for a low credit rating. However, it isn’t all that difficult to re-establishment yourself in the credit arena. There are many lenders out there that are more than willing to open up a credit line to high-risk borrowers. Even people with little to no income can be extended credit. The lender knows that many will default and they simply charge off those debts and continue lending.
Though a person on a fixed income (such as Social Security) is less likely to want to go into debt, future employment (if it is needed) could require a good credit rating. Not all prospective employers will review your credit; many will take a look at your credit score. It is important that your credit report shows that it is improving over time.
Buying a car is usually the first thing people think of to do to improve their credit score. There are many car dealers out there that will definitely sell a car to you, regardless of your credit report, but you suffer on interest and down payment amounts. Your chances of default are high due to limited income and assets.
A better idea to improve your credit is getting one or two secured credit cards. You are required to put a small down payment of $500 to $1,000 to acquire the cards. Take the time to save up the down payment and apply for these secured cards. You can safely build up your credit – though it will take time.
There are unsecured credit cards available online, but the interest rates and fees are extremely high. In most situations, the secured credit cards are a better route. If you do choose to go the unsecured credit card route, be absolutely sure that the lender notifies all three of the credit bureaus — Experian, Equifax and TransUnion of your line of credit. You want to make sure you are improving your score for all three bureaus beginning immediately. Even though you get approved for a credit card, be sure to keep in touch with each of the credit bureaus to make sure that your credit report is gradually improving.
For more information or for questions to commonly asked questions about filing for bankruptcy, please get in touch with the experienced southern California bankruptcy attorneys at Westgate Law today.