Credit Unions Can Help After Bankruptcy
Rebuilding your credit after bankruptcy is not automatic. Raising your score and proving your credit-worthiness takes vigilance and persistence. If you never re-establish your credit, then the last (and eventually, only) entry on your credit report will be your bankruptcy filing. To raise your score, you must show responsible use of credit.
There are many credit roads to take after bankruptcy. Many individuals report receiving credit card offers in the mail a few weeks after filing bankruptcy. Most of these offers contain high interest rates and fees, but are effective to re-establish a revolving credit history. Installment loans and revolving credit are two types of credit that will quickly raise a credit score.
Perhaps the safest and least costly way to rebuild your credit is by taking advantage of credit building programs at your local credit union. Unlike banks, which are publicly owned and concerned with turning profits for shareholders (generally through large-scale lending), credit unions are owned by members and are not-for-profit institutions. Consequently, most credit unions offer aggressive and helpful products to assist members with credit problems.
Credit Builder Loan
A Credit Builder Loan is an old trick that bankruptcy debtors have used for years. It is a simple signature loan secured by a cash deposit. For instance, you give the credit union $500, and it loans you $500. You make a monthly payment at a low interest rate, and the credit union reports your payments to the credit bureaus. At the end of the loan, the deposit is returned to you, plus interest.
Secured Credit Card
Many credit unions also offer secured credit cards to their members. A secured credit card works in much the same way as a Credit Builder Loan: you make a small cash deposit with the credit union, say $500, and the credit union extends you a credit line on a Master Card or Visa. When you make a small purchase on the card and pay the monthly payment, the credit union reports the responsible credit usage and payments to the credit bureaus. Once the account is finally closed, the deposit is returned to the member. In many cases the secured card is converted into an unsecured card after the member proves his or her credit worthiness.
Rebuilding a credit profile after bankruptcy and raising your credit score is not difficult, it just takes some savvy and some effort. Your bankruptcy attorney can provide you with helpful credit rebuilding tips and suggestions that are tailored to your individual case.
If you are considering filing for bankruptcy please contact the experienced attorneys at Fears | Nachawati for a free consultation. Call us at 1-866-705-7584 or send an email to email@example.com.