So, you bit the bullet. You realized you were in too deep with your debt and decided to file for bankruptcy to get a fresh start. That’s great, but maybe now you’re thinking what’s next? What steps can you take going forward to mitigate the impacts of that decision?
Filing for bankruptcy is not a bad thing and many good people file because they see no other way out of debt. Bankruptcy represents a crucial option for those drowning in debt.
Of course, there are short term implications where your credit is concerned, but how fast you recover makes all the difference. In order to effectively rebuild, you need new credit to demonstrate to lenders that, after bankruptcy, you can pay your credit obligations on time. However, this can be tough to do if a lender is unwilling to extend credit to you, and most will only do so for a small amount.
However, if you want to own a home or finance a vehicle in the future, you will need more than a small secured credit card to prove your credit worthiness.
Even if you are undischarged, the time to look at how you can rebuild is now.
A secured credit card is a good place to start. This is a card where you provide the money and that money is essentially loaded onto the card. You treat it like a credit card, making monthly payments, etc., and it reports to your credit report. When you get the secured credit card, go for a limit of $1000-$3000 and don’t use the card for more than you can pay in full each month.
Still feeling financially pinched though and don’t have the money to get secured credit products like a secured card? There are other options.
A secured GIC loan reports to credit and is an investment – this is another good, but smaller, credit option. It will also help you save.
For a larger loan, consider leveraging what you have as far as personal assets. If you have a used vehicle that is paid off, or a home with significant equity, these can be used as security to a loan. You can then use the loan to get a secured credit card.
This option leaves you with 3 new credit products – a GIC loan, a secured personal loan and a secured credit card. All three report to your credit report, are safer in that you are less able to get in over your head, and give you the flexibility to rebuild.
If you’ve filed for bankruptcy and now want to start rebuilding your credit, Prudent Financial can help.
Call us today at 1-888-852-7647.