How Can I Increase My Credit Rating After Bankruptcy?

Nobody likes a pessimist. But somewhere in between is the realist who is totally disinterested...meaning unbiased. I don't know about you but I find the headlines and sub-headlines regarding the U.S. economy for the past 6 months or so misleading. The press tries so hard to interpret any uptick as "recovery." I saw one headline today "Retail sales up 9% in March!" But last March retail sales were down 5%. Last week, the Feds stopped buying mortgaged backed securities which has been artificially keeping lending rates down. Today's headline "The era of record-low mortgage rates may be over." The fact is that mortgage rates have jumped from 5 to 5.3% in the past week. When mortgage rates increase by 1%, tens of thousands of would be buyers are forced out of the market.

In 2009, 5.75% of home loans were "delinquent". It now stands at 8.78. Holy moly, nearly 1 out of 10 homeowners are behind 90 days or more on their payments!

The #1 industry that can lead us to recovery is the real estate market. And, this industry is under assault. How can the economy currently be in recovery recognizing the facts outlined here? Yesterday, Bernanke said " U.S. will have to raise taxes and cut spending." Duhh. We must become solvent in order to recover.

Related

How long you have had credit and what type of credit

Your payment history and outstanding debts

'Black data' - bankruptcies, defaults, late payments

Your credit rating is important because banks and lenders will use it to determine which of their products you are eligible for. If you have a poor credit rating your interest rates will be higher and the amount of credit you can apply for lower. It also affects mortgages, buying a car, renting property and a number of other factors that will be important in your life.

What is bankruptcy?

Sometimes a person finds they have more debt than they can possibly pay back. The person in debt then files for bankruptcy. This helps to alleviate some of the stress because the debtor is not being constantly pursued by creditors and there is a clear payment plan, which can involve some aspects of the debt being wiped.

How does bankruptcy affect my credit rating?

Bankruptcy may seem like an easy way out, but it has a very bad effect on your credit rating, which is why it should only be used as a last resort. There are a number of ways to begin building-up your credit rating again. Although some creditors will see bankruptcy on your credit report and decide not to accept your application, others may be more lenient and take into consideration your most recent financial dealings. If you can prove that you can manage your money well, then the outlook wont be all bleak for the next ten years. Some things that you can do to heal your credit rating are:

Stick to the repayment plan that was agreed when you filed for bankruptcy

Make your payments on time, late payments will only add to a poor credit rating

To find out if there are any in your area, or for information on credit counsellings, contact the Federal Trade Commission: ust.cc.help@usdoj.gov / 1-202-514-4100.

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Spent 2001-2006 testing the market for shaving cream in Naples, FL. Spent 2002-2010 developing bongos in Mexico. Spent 2001-2006 testing the market for bathtub gin in Jacksonville, FL. Gifted in analyzing accordians in the financial sector. Have a strong interest in importing toy planes in Miami, FL. Spent 2001-2008 merchandising bullwhips on Wall Street. #keep##randurls[3|1|new line|Social Network 1 URL List 1|]#

Posted on 2011-04-07, By: Shawn Giles *

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Note: The content of this article solely conveys the opinion of its author, Shawn Giles