One of the biggest concerns anyone going through bankruptcy in Texas is likely to have centers on rebuilding their credit score after their previous debt has been cleared as a result of the process. It’s a legitimate issue because of how much we rely on credit on a day-to-day basis.
It might be a bit over the top to say it, but to paraphrase a line from another industry, without credit, life itself would be impossible. That makes credit rehabilitation essential. The good news is that it is possible to achieve, perhaps more easily than you think.
As was pointed out in a recent article by Bankrate.com’s Bankruptcy Adviser, willing lenders are likely looking for you already. They tend to view individuals who have gone through Chapter 7 bankruptcy in a good light because they know two things.
First, after leaving Chapter 7, most people don’t ever do it again. Second, a person can’t seek to discharge debts again for eight years. That makes individuals who have cleared bankruptcy and are now debt free potentially lower risk. So getting a standard card with unsecured credit shouldn’t be too difficult. The terms might include higher than normal interest rates and high annual fees. But that still offers you a starting point.
Another strategy offered by the adviser is to seek a line of credit through a credit union or bank. The limit on borrowing may be more restricted, but the link to a mainstream lender may serve to improve how other lenders look at your applications in the future.
The key thing to remember is that just as the bankruptcy process takes some time to complete, so does the process of rebuilding your credit. The sooner you get started on each task, the better.
Source: Fox Business, “How Do I Establish Credit After Bankruptcy Discharge?” Justin Harelik, Bankrate.com, April 22, 2014