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Steps On How To Improve Credit Score After Bankruptcy

Tuesday, October 17th, 2017

By Tim H Lambert

When you have declared bankruptcy in your business, your credit score will be greatly affected. Your score will definitely go down and you will suffer a lot of consequences. You can no longer charge or purchase items using your credit card. In addition, you may be required to pay for higher interest rates. Luckily, there are a lot of steps on how to improve credit score after bankruptcy. Fixing or increasing your credit score after going to this kind of situation would take some time. If you focus on improving your credit score, you can get good results within a year up to 18 months.

Open a charge account at a retailer store that sells appliances or pieces of furniture. This is because the big retailer stores would be more willing to give you credit after knowing that you declared bankruptcy. You might get a soaring amount of interest rate. However, the value of the product that you are going to get will also boost your credit score. Once you buy the item from that store, make sure to pay half of the total sales price. This is important because putting down a large down payment will make it easier for you to pay the whole lot. In addition to this, if you pay half of the total price, you will not have an interest which is too high for you to handle.

After that, open a secured credit card account and convert it to an unsecured account after a certain period of time. If you are paying your balances on time, the conversion can be made from 6 months to 1 year. Take note that converting a secured account to an unsecured one will mean a high interest rate. However, having a regular account will also improve your credit score so it’s worth it. In addition, you will also improve your credit score by opening and paying for additional accounts at the right time.

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Make sure that you are able to pay your bills on or before its due date. You should pay for your newly opened accounts and other assets that you have kept after bankruptcy. Your assets include a car loan or a mortgage that are still running. Paying your bills on time will show that you are able to manage your finances. Once the lenders see that you are working hard and are managing your finances well, they might become your good prospects.

Lastly, always keep an eye on your credit report. This report contains all the necessary information regarding your finances including transactions, loans, payments and others. You may want to order a copy of your credit report from one or all of the credit bureaus. This is important so that you can see whether or not errors are present. Once you see an error or anything that you do not recognize, contact the credit bureau immediately and ask for a clarification. You can also ask for a correction if you believe that one or more data in the report are erroneous.

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