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Ten (10) Tips For Rebuilding Credit


Your ability to re-establish credit after filing bankruptcy is better than ever.

After you get your bankruptcy discharge, you will receive many solicitations from lenders offering to finance homes, vehicles and credit cards.

And....why not?

Bankruptcy gets rid of debt and getting rid of debt is the first step for re-building credit. Getting rid of some debt puts you in a better position to handle more credit.

In fact...many, many former clients have told us they started getting credit card offers right away...within weeks after their bankruptcy case was done.

Here are some tips on how to rebuild your credit.

1. Open a checking or savings account. And, start saving some money. You will need money for down payments. The more money you can pay down on a purchase, the lower the interest rate you will get. Besides....Lenders may look how you handle a checking and savings account as one indication of whether or not you can responsibly handle money.

2. Apply for store and gas credit cards that you would normally pay cash.

3. Apply for a secured card where you deposit cash and charge against it. Make sure you only apply for secured cards with a company that promises to report regularly to the major credit reporting agencies. The major credit reporting agencies are Equifax ( , Experian ( and TransUnion ( They maintain your credit record. Think about it. What good does it do to get a secured card from a company that does not report to the major credit bureaus? Pay back advances in a timely fashion to build a track record of paying on that they will be reflected as positive marks on your credit report.

4. Pay your utility bills and rent on time
. After filing bankruptcy...building up a history of paying on time is crucial.

5. Find a friend or relative to cosign for you on a loan and pay it on time. careful here. If you don't pay it or don't pay it on will do significant damage to the credit record of the friend or relative who was kind enough to cosign for you.

6. Look for car dealers and mortgage brokers that claim to be "bankruptcy friendly". Buy a used car so you do not get hit with the depreciation that occurs during the first two years of a new car purchase.

7. Stay away from payday loans and finance companies that are at high interest rates and are a "bad credit" trap. These outfits will suck you dry and leave you back in debt.

8. Write a letter to each credit reporting agency explaining the circumstances that lead to you filing. You are allowed to submit up to 100 words of explanation to each credit reporting agency.

9. Live within your means. If you don't have the money....don't spend it. If it helps....Limit yourself to what you need...rather in the old days that lead you deep into debt....when you bought everything you wanted...whether you needed it or not. a rough guideline....try to make sure your payments on consumer debts don't exceed 20% of your expendable income.... after your costs for housing and a vehicle.

10. Pay your remaining debts....left over from your bankruptcy....on time. This is worth repeating. This includes things like non-dischargeable taxes, student loans, car loans, truck loans, and house mortgages. This is crucial...if you want to reestablish your credit.

Make sure the information on your credit report is accurate.
The best way to do this is to get an updated copy of your credit report.

After filing bankruptcy, it's probably a good idea to get an updated credit report every 6 months for a year or so.

How do I get a copy of my credit report?
The easiest way is to get it directly from one of the 3 major credit reporting agencies. Each of them offers a "3-in-1" credit report, which simply means a credit report containing all the information from all these of their agencies. The best way to order your credit report is "online". You can go to any of these websites: Equifax ( , Experian ( and TransUnion (

There is also other valuable information on these websites, including: (1) information to help you understand your credit score, (2) further information on how to rebuild your credit, and (3) information on how to fix any errors that may appear on your credit report.



2003-2008 Clark & Washington, P.C.
(865) 977-0121
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
Disclaimer: This Website contains general information about various areas of bankruptcy.
It is highly recommended that persons with debtor/creditor problems seek the advice of an
attorney. The information on this Website is not intended to be legal advice and viewers
should consult with an attorney.

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