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Bankruptcy Credit Repair

Make Sure You Address Your Gaps in Your Credit History

Make Sure You Address Your Gaps in Your Credit History

A key component to repairing credit is being able to access one’s credit history in the hopes of understanding how much progress has to be made before one can be considered a good candidate for a loan or credit card. Indeed, many of the entries on a credit history report may not reflect good credit practices or positive credit events. Financial maneuvers such as declaring bankruptcy and restructuring your debt get factored into your credit history.
For those who aim to repair their credit or have a reasonably good credit score but are still looking to improve it, a critical, direct strategy for turning things around is to evidence solid debt/loan management to credit reporting agencies when creditors fail to disclose this information. Making timely payments is one important way to improve one’s credit.
Other absences on a credit history report may have little to do with the contents or nature of monies borrowed, but of standard identifying information. Some of these details, while obviously necessary for a complete personal credit history, may nevertheless have an unexpectedly large impact on your credit if missing.
For example, some debtors might think it inadvisable to include a telephone number in their credit history report, especially as creditors might see it and exploit it to pester their customers at home. On the flip side, though, most creditors already know your number and are calling it if you continue suffer from debt. More importantly, a permanent phone number is a hallmark of home ownership and, thus, financial stability.
In addition, if you are recently married or divorced and you think the inclusion or exclusion of your spouse’s credit history is advantageous to your own ability to generate good credit, you may also ask a credit bureau if they will consider adding your partner’s records to the mix. This may be especially prevalent if you and your wife or husband have opened a joint checking account. While credit report agencies are under no obligation to affix this to your credit history report, if you have maintained a friendly, respectful rapport with yours, circumstances may turn out in your favor.  

Facts to Know to Build up Good Credit

Facts to Know to Build up Good Credit

The concept of credit building as part of the credit rebuilding process may seem like somewhat of a paradox. Often, by virtue of your poor credit rating, you will need to build credit, but in order to build credit, you usually need an adequate credit rating to do so. For the despondent debtor, then, it may seem as if credit building is a lost endeavor before it even begins. However, it must be stressed that repairing one’s credit will not happen overnight.     
Of course, while the lack of lenders that may want to deal with an individual with a low credit score will definitely be a limiting factor in trying to build credit, the use of credit is widespread enough that there will be a lot of lenders out there to weed out before finding one that will be willing to take a chance on issuing him or her credit.
In the game of credit building, the objective often must be to start small. One route that is commonly suggested of creditors is to try to strike up an agreement with a local merchant in purchasing a given item on credit, such as a piece of furniture or electronics equipment.          
Along the same lines, consumers may be able to build credit by negotiating with certain dealers who trade in specific, high-priced products that are equally necessary to the buyer, if not more so. One particular example is the purchase of a new or used car, which will almost certainly cost its recipient thousands of dollars when all is said and done.
Seeing as few people would be capable of covering the price of an automobile up front, most would instead need to pay in installments. Thus, for the person on the mission of credit repair, this is another opportunity for credit building. As with arrangements with other merchants, contracts signed with car dealers for loans will also probably result in high interest rates and down payments, but the potential improvement to one’s credit rating may be of a more substantial benefit.
Another way to build credit is through securing real estate, namely as a homeowner or apartment leaser. Credit building through such a strategy may likewise involve significant search times, expansive searches geographically at that, to find an amenable creditor. Just the same, some realtors/realty agencies may specifically target lower-income and lower-credit clients in hopes of making a sale, especially in inhospitable housing markets.
If possible, debtors may have to employ a third party in securing a home loan. One possible solution is interaction with a bank, financial institution or credit union to discuss financing the move into a new house or loft. Applicants might even have a family member or friend with better credit cosign on their behalf, although, this puts both parties at risk.

What Happens After I File for Bankruptcy?

What Happens After I File for Bankruptcy?

\After you file for bankruptcy—regardless of the chapter you file under—your credit rating will take a dive. That being said, the process enables a consumer to quickly rebound; bankruptcy filings, in essence, give you the ability to secure a fresh start after a few years. 

Credit Offers Bankruptcy:
Although your credit profile will take a hit after bankruptcy, you will still have the ability to obtain credit after bankruptcy. Note: credit offers after bankruptcy will not be attached with desirable terms and securing legitimate lines of credit may take several months or years. 
After you file for bankruptcy your debts will be effectively cleared. However, you should expect a number of inquiries and difficulties concerning the ability to secure a favorable loan or line of credit. For example, credit offers after bankruptcy will typically be extended by unscrupulous credit card companies or loan agencies who will flood you with offers for low-balance cards to help “rebuild” your damaged credit after bankruptcy. Unfortunately, the majority of these offers are attached with activation and membership fees, as well as exorbitant interest rates. Because of these unfavorable variables–and the susceptibility they present regarding further credit problems—you must be prudent when choosing your credit after bankruptcy. 
Following a bankruptcy filing, you will not immediately qualify for conventional mortgages, car loans or other installment loans. Credit after bankruptcy will enable you to secure installment loans after you have demonstrated a reliable ability to repay unsecured debts for a period of 2-3 years. 

How to Rebuild your Credit after Bankruptcy:
Following a bankruptcy filing, you will need to rebuild your credit in order to secure suitable loan or credit terms in the future. Credit agencies will file a bankruptcy as a “court judgment” on your credit report for 10 years after filing—the average court judgment will reduce your credit score by 50-100 points. 
After you file for bankruptcy it is necessary to obtain a copy of your credit report. It is critical to double-check the information on your report concerning your bankruptcy filing—misinformation can perpetuate the negative effect of the filing. After you have checked your report for accuracy, you should contact a credit counseling agency. These institutions will construct a budget for you, to ensure that a financial calamity does not occur in the future. Furthermore, a credit counseling agency will advise you on appropriate routes to rebuild your credit. 
The easiest way to rebuild your credit is to take out new lines of credit and be responsible with your payment obligations. If you consistently pay-off your lines of credit, your credit rating will eventually rise. If you steadily pay-off your debts, avoid late payments and maintain a low debit to credit ratio, lenders will take note; if you portray willingness and an ability to pay-off your debts, your credit after bankruptcy will eventually be restored. That being said, it is essential to not over-extend yourself; when your credit after bankruptcy is refurbished, be sure to  maintain your prudence that enabled you to rebuild your credit. 

Short Guide to Opening a Bank Account

Short Guide to Opening a Bank Account

While trying to open a bank account with bad credit may not involve someone literally jumping through hoops to secure their account, nonetheless, it will likely not be a walk in the park either. The concept of balancing a checkbook and checking account is closely related to people’s ability to balance their income and expenses/loan payments.
Going back to the potential benefits of a savings or checking account, the uneducated consumer may see little difference between keeping their money in the bank and keeping it under their mattress or in change jars. However, aside from the interest.
As with any private entity, prospective customers should shop around before electing to go with any bank. Though decisions may be more limited given the circumstances, those who move to open a bank account with bad credit should still make an effort to research the terms of service of the banks that are the best candidates from which to request an account application. Some banks’ willingness to issue people bank accounts with bad credit may be tempered by high fees for writing checks, using ATM’s and making transactions using an account or bank debit card.
Then again, whether or not a potential borrower wants to open a bank account with bad credit may not have as much bearing on his or her application as may other elements of his or her financial/credit history. With checking accounts, say, granted, the issuance of bank accounts with bad credit may be hampered to a large degree, but what could be even worse for petitioners’ case is if they have a bad record of writing checks for money they , keeping one’s money in a bank provides for added security that a mattress cannot provide.

Facts to Know Before Obtaining a Savings Account Loan

Facts to Know Before Obtaining a Savings Account Loan

Young adults just becoming acquainted with managing their own financial affairs may only see a bank as a place to store their money and take it out as needed. Those more familiar with how these financial institutions operate, though, understand that banks may be so much more. For one, the type of account for which a party signs up may be highly specific to their purpose. There are important distinctions to be made, for example, between checking accounts and money market deposit accounts.
On top of this, banks may serve an equally important service as a lender. Certainly, banks have the means and reputation to issue loans to average people. The question of eligibility, of course, lies with the loan applicant. If personal credit is to have a bearing on opening a savings account, it will likely affect an applicant’s ability to secure a loan. Nonetheless, after credit is established and maintained with said savings account, this may be used as a gateway to an extension of credit via a savings account loan.
Some notes on savings account loans and how they may be obtained:
To understand how to get a savings account loan, it would be helpful to know what one is. Savings account loans, known in some circles as passbook loans, are secured loans. A savings account loan is a high-interest, low-risk arrangement between borrower and lender.
For the debtor, the interest charged on savings account loans is higher than with other loans and for those of debtors with higher credit ratings. As is consistent with other methods of credit repair, these rates are the literal price that must be paid for the good that may be earned towards one’s credit.
For the bank, what makes them receptive toward issuing someone a savings account loan is the low risk involved. If debtors default on their savings account loans, their accounts serve as the collateral and their contents may be reclaimed accordingly.
In obtaining a savings account loan, the process is as simple as filling out an application, but it should be noted that there are requirements and stipulations attached to securing this type of credit. Firstly, banks do not let debtors borrow against the entirety of their savings accounts, but rather about 80 to 90 percent of them.
They will also have bank-specific minimum deposits for taking out these loans. In addition, the issuer of a savings account loan will usually specify a minimum payment per month and the length of the loan repayment period required.

Read This Before Going To A Credit Repair Companies

Read This Before Going To A Credit Repair Companies

It is not as if every credit repair company is a crooked organization that tries to take advantage of debtors looking to rebuild after financial disaster. Some credit repair companies do follow Federal statutes and FTC guidelines, and are genuinely vested in the welfare of their clients. Unfortunately, however, the majority of the businesses are anything but, and are only selfishly motivated by profit.
Many Americans have either solicited the help of a credit repair company or have expressed the desire to do so, possessing little knowledge of how credit works and no real knowledge of how to fix it. Numerous analysts would suggest that credit repair companies can do no more for debtors than they can do for themselves. Still, some are convinced they need the aid of a credit repair company or a comparable service.
For those who are resolute in their plan to consult with credit repair companies despite being highly advised not to, here are some things to consider:
Oftentimes, unassuming consumers will get off easy with having to pay extra for legal operations they have the capacity to perform. One of the key components to credit repair is access to a copy of one’s credit report, so that it can be assessed for accuracy and amended accordingly.
Credit repair companies will frequently expect remuneration for taking entries out of a credit history—whether or not they are wrong. Debtors, meanwhile, do have the ability to perform the task of removing misinformation from their files themselves via the Fair Credit Reporting Act. Through the same piece of legislation, credit reporting agencies are protected from the underhanded tactics of these repair companies.
At worst, a credit repair company may not just employ unethical practices, but blatantly illegal ones. One common charge of credit repair companies is that they defraud creditors by swapping the information of the legitimate debtor with a low credit rating of that of a stranger.
In some extreme cases, repair companies have commingled details of a living American debtor with a deceased person or a resident in an overseas territory like the Virgin Islands. In other instances of unlawfulness, shady credit repair businesses have deliberately hijacked the records of creditors using computer technology, and have later been exposed for their crimes, but not before taking debtors’ money in the process.
Indeed, it may be rather difficult to separate a meritorious credit repair company from a sham enterprise. The best resources prospective clients have in this regard come from nationally recognized institutions and federally-binding legislation. The Better Business Bureau, for one, may be able to shed some light on whether or not a particular company is worth the investment or is to be avoided at all costs.
The Credit Repair Organizations Act (CROA) also brings a set of standards on how credit repair companies operate. Any repair company who abides by the CROA should do the following: inform customers of their rights upfront and outline a full list of fees and a payment schedule.

Bankruptcy Credit Repair: Short Guide

Bankruptcy Credit Repair: Short Guide

As people's credit score often goes unseen by them, the attitude that a credit score is just a number may pervade the general consciousness. However, frequent advertisements on television or through other media about viewing one's credit report for free would seem to indicate that the problems of people with low credit ratings may be equally pervasive.

The nature of credit, especially in comprehending how it is generated, how one's rating goes up and down, and how the history of one's credit is recorded, all tend to be fairly misunderstood by many Americans. Consequently, it may not be until a point of credit crisis that a full realization of the power of one's credit rating hits. In cases like these, the need for repairing one's credit will be self-evident, and the long road to respectability as a borrower can finally begin. 

Understanding Credit

While people who are suffering from a low credit rating may be banking on a fast solution to their situation, they must be prepared to accept that there are no easy answers when it comes to repairing their credit score. Repairing one's credit is, in fact, a long-term endeavor, and before they move forward debtors should be sure to brush up on their knowledge of what credit is if they plan to effectively address their problems.

Credit is the borrowing of monies from lenders with the understanding that the debtors will pay it back in full plus interest. If borrowers maintain a poor record of making credit/loan repayments on time, though, they will become a riskier prospect for creditors and, in turn, their credit will suffer.

The idea is to build credit, or rather, rebuild credit back to its prior status, or if this is not feasible, at least to an acceptable level. After all, one's credit rating can easily go down much faster, but it is not a fixed number.

One thing that will definitely be a good influence on people's credit scores—their most visible symbols of their credit history—is the acquisition of a job or some other sign that they can generate capital for the purpose of meeting their scheduled payments. Plus, noting the variability of credit scores, the same forms of credit that worked against delinquent debtors the first time around can be used to right the proverbial ship with the right effort.  

Fixing your Credit Report

As much as understanding the nature of credit is important to repairing it, so is understanding what is at stake with one's credit report. Included within a credit report/credit history, aside from the requisite identifying information, Social Security number, address and employer, are details about how the consumer has fared in prior situations when they were afforded credit and whether or not they were timely with their payments.

Credit reports will be specific enough to list creditors' identities, explain the nature of the extension of the credit, and what the current status is regarding these loans. It may not be immediately grasped by debtors, but the dereliction of meeting credit-related financial obligations may affect the ability to buy a home, hold down a job, or fulfill other big aspects of the human condition.

To address the litany of problems associated with a spotty credit report, the role of a credit reporting agency cannot be underestimated. Credit reporting agencies have connections with both debtors and creditors, collecting records from borrowers' performance on various measures of credit, and (presumably) distributing this data only to concerned parties. To the benefit of the debtor, meanwhile, they will often be able to secure a copy of their credit report for a nominal fee, or perhaps even for free through agencies specifically designated by the Fair Credit Reporting Act. 

Addressing Gaps in your Credit History

Sometimes accessing a credit history/report will cause an individual dismay and alarm at seeing the preponderance of negative credit events. Meanwhile, absences of information may be just as shocking and troubling to a debtor, especially when they may serve to counteract instances of poor credit performance.

Even seemingly minor details, though, may go further than one might initially expect. For example, debtors may conceive of a phone listing as nothing more than a way for credit reporting bureaus and creditors alike to contact them, but adding or correcting a valid phone number in one's credit history also serves notice that the individual has access to utilities and can afford to make payments on them on a regular basis.

Factoring in a spouse's/ex's credit rating may likewise seem inconsequential, but the other person's records may serve to absolve the debtor in question of culpability somewhat or bolster his or her case for gaining new credit.

Building up Good Credit

Having a bad credit rating is a bit of a double whammy. When debtors have low credit, they will often not be considered by creditors for an extension of credit, and meanwhile, they will need to borrow money from creditors to raise their credit. Under these circumstances, the solution to building up new credit may be working with easy-to-earn sources of credit and proving themselves to these "lesser" creditors.

Rather than trying to tackle a major credit card (which probably won't be realistic options coming off of bankruptcy), debtors might opt to purchase an item on credit from a small-scale vendor or a local car dealer, or might take out a lease on a piece of property with a realtor or buy from an especially motivated seller.

In exchange for the spike in one's credit rating and the services rendered to him or her by the creditor, the borrower may have to endure some less-than-preferable circumstances. More than likely, a third party lender such as a bank or credit union, or a cosigner such as a close relative or friend, can be made liable in the securing of this credit if the debtor perpetuates the same bad habits of failing to meet credit obligations. Even if the loan works out as planned, though, the high rate of interest typically charged in these situations can be prohibitive.

Using Credit Cards

The use of certain measures that often help to get people in debt in the first place may be the only way to go about restoring one's credit. Credit cards, for example, which are notorious for their overuse by consumers and the high interest rates levied by lenders, might inspire reservation and fear in people who have fallen victim to their dangers, but are also a fairly fast way of repairing credit.

Some people might be forced to take creditors out of their lives for good and make do without credit cards. Meanwhile, if the individual has never owned a credit card but is interested in signing up for one, especially as a conduit to credit repair, there may be easier ways of going about getting one.

A credit card from a bank or other financial institution may be out of reach, but a card from a department store or gas station will be more readily available. However, this option is a bit risky in its own right considering the high interest rates associated with credit cards in general. Secured credit cards, which are named as such because they are secured against one of the borrower's assets, may also work for people looking to repair their credit. These people must be prepared to lose whatever bit of collateral is involved with secured credit in the event they default. 

Opening a Bank Account

Along with credit card companies, banks may be hesitant to do business with consumers suffering from low credit ratings. Nonetheless, people looking to rebuild their credit should make a strong effort to open an account with a bank in spite of these hardships. The ownership of a bank account, unlike with credit cards, tends to connote that a person is serious about his or her credit and saving his or her money.

As with credit cards, though, high interest rates might work against the debtor's favor. Moreover, the individual whose name will appear on the bank account might need to enlist the aid of guarantor in cosigning for the loan.

An added concern of creating and owning bank accounts in the credit repair process, meanwhile, are fees and special considerations attached. Aside from the interest rate, several charges by banks for their services may be hard for borrowers to swallow, so prospective account recipients should do some research to make sure both the account and the bank they are considering is worth the investment. In particular, checking accounts may be problematic for some people who have a bad history of writing checks without the capital to back it up. 

Obtaining a Savings Account Loan

Not only are banks useful as a place to deposit money and withdraw it as needed, but they also have the capacity to be lenders. For the individual looking to build credit through a loan, a savings account loan, also known as a passbook loan, will be a prudent course of action. This high-interest agreement, which holds borrowers and their savings accounts accountable in the event of default, may be of merit to both debtors and creditors.

For the borrowers, above all else, they actually have a circumstance by which they can take out a loan from an accredited institution and no other possessions outside of their savings in the bank can be touched. For the lenders, the fact that this money already is held in the bank and may be used in the event they need to collect also presents an advantageous situation.

There are certain limiting conditions attached to passbook loans. Depending on one's chosen bank, he or she may need to have upwards of $1,000 or $2,000 before he/she can apply for such a loan and/or can be forced to meet minimum monthly payments over a period of several years. In addition, as per a common stipulation of savings account loans, people who use them will not be able to access the money in their accounts and will only be able to borrow against a portion of their savings in the bank.

Avoiding Credit Repair Companies

Though not every credit repair company is an illegitimate enterprise, a good amount of them in the United States are untrustworthy for debtors and creditors alike. There is a fundamental assumption that people can do a number of the things these companies offer to handle for themselves (e.g. changing their credit reports), and for free at that. 

In terms of the unethical, immoral, and illegal practices perpetrated by companies, seemingly nothing is out of bounds for disreputable businesses of this sort. For one, they are prone to stealing credit information from outside networks, unlawfully changing it, and challenging debtors on the inaccuracy of information in one's credit report when nothing is wrong. Unlicensed credit repair companies have also been reported to attempt to defraud lenders by borrowing information from credit histories of non-applicants and throwing them into the mix.

In addition, there are the usual bad business practices to take into account, such as the failure to disclose fees and terms of service. For all of the above, it is recommended that debtors exercise great caution when enlisting the "aid" of a credit repair company, or preferably, avoid them outright. If you need legal advice and assistance, contact a bankruptcy lawyer.