After the bankruptcy has completed, most people enjoy a real feeling of peace. After months or years of harassing creditor phone calls and threatening letters, it’s really nice to be able to take a deep breath, sit back and relax. At this point, many people wonder about the best way to rebuild their credit rating.
The Credit Card Trap
The bankruptcy will remain on the credit report for ten years and another chapter 7 bankruptcy in Arlington, TX cannot be filed for eight years. This means that if any of the less reputable credit card companies are able to convince someone fresh out of a bankruptcy to get new credit cards, that person cannot halt any collection attempts for eight years. Not only that, but the credit card companies can –and will– stuff these new cards with high interest rates and excessive fees.
Expect offers for new cards to begin arriving from Providian, Capital One, First USA, Orchard Bank and many others. The companies consider these “high risk” credit cards; they are not the same as credit cards that might have been held in the past, for example: a card might have a $16 monthly administration fee, but if the card goes over the limit expect a $35 over-limit fee.
The Right Way to Rebuild Credit
There are two ways to begin to establish a good credit rating. It will take time, but stick with it.
1. Pay Bills on Time
This is especially true for any secured loans, such as for a house or car, but pay all bills on time.
2. Get a Secured Bank Loan
Deposit $500 into a bank savings account, then apply for a secured loan from the bank for $500; the bank will put a “hold” on the savings account so there is no risk for them. Make the payments on time every month and within a few months, credit will have been established with the bank.
Chapter 7 bankruptcy in Arlington, TX is designed to allow someone to get a fresh start, so take full advantage of this opportunity to build a prosperous new life. Many people have gone through a bankruptcy, rebuilt their credit the right way and gone on to buy a home, a car or even start a business. If you are feeling overwhelmed and wondering if bankruptcy could help you, contact David S. Kohm & Associates for a free consultation at .
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