Repairing Bad Credit After BK

Even if you have a bankruptcy on your credit report, you can offset that bankruptcy by adding positive credit to your report. You can have an A+ credit rating again within a year or two after you come out of bankruptcy by taking the following affirmative steps.

1. Creating Positive Credit: If you have an excellent credit history with some creditors who are not reflected on your credit report you may be able to add them. In order to input positive or negatives a creditor must “belong” to the credit reporting agency, i.e., experian, and some creditors don’t belong. For example, mortgage companies usually don’t belong so your mortgage payment record may not show up on your credit report. Usually for $2 or $3 per creditor you can have that information added to your credit file. Check with each credit reporting agency (there are 3 in California) as to their requirements for adding non-member credit experiences.

2. Get a Visa and/or MasterCard: A Visa and/or MasterCard is probably the best credit reference you can. Therefore, it is important to get one of these cards and make regular steady payments to improve your credit rating. If too many negative marks remain on your credit report or your income is less than $1,000 a month you can still get a secured version of one of these cards. These are debit cards where you deposit a certain amount with them as security for your purchases. You can get secured Visas and MasterCard. These cards are excellent ways to re-build your credit rating and are virtually as effective at bolstering your credit as an unsecured card.

Remember however to review the terms of a card before you apply for it. Such relevant terms are annual fee, low APR, surcharges and length of the grace period.

3. Retail Store Cards: Also somewhat effective at rebuilding credit are department store credit cards. They are usually relatively easy to get especially if you already have a Visa or MasterCard.

4. Entertainment and Travel Cards: Such cards as Carte Blanche and American Express which force you to pay off the balance each month are not great credit builders since they are not considered as strong of an indication of how well you handle debt. But, a good reference is a good reference and you don’t end up paying interest.

5. Mortgages and Auto Loans: Mortgages tend not to improve your credit rating tremendously since they are secured.

6. Savings and Checking Accounts: Having a checking account with a good payment history is factored in heavily in your rating as is a savings account.

7. Employment: Your position and length of employment at a particular job is a factor commonly looked to in making credit decisions.

8. Other Credit Cards: Make sure that the card company reports that you are making your payments on time. Gasoline cards and mortgage companies often do not bother reporting unless you are delinquent in your payments.

9. Cosigning: If your creditor insists, you may need to get someone to cosign for you. This means that if you are unable to pay back the loan, the cosigner is legally responsible to pay it back. This also means that any negative information that arises out of the cosigned debt will adversely impact both the cosigners and your credit. However, by having someone with good credit cosign for you, you may qualify for much better credit than on your own, thereby expediting your credit’s repair.

10. Borrow Credit: By becoming an “authorized user” of someone’s credit card, you can in effect borrow someone’s credit history. Find a friend or family member that is willing to contact their credit card company and make you an authorized user. Of course, make sure to pick a person with a good credit history on that particular card. If the person who is allowing you to be an authorized user is less than enthusiastic about the arrangement, you can give him the credit card when you receive it. In other words, for this system to improve your credit, you really do not have to do anything except piggy-back on the other person’s past and continued good payment history. The most obvious danger here is if the person starts to neglect paying his/her account.

11. Running Balance: It is best to keep a small running balance on your cards while rebuilding your credit, rather than pay them off in full each month. Although it will cost you some interest payments, it shows an ability to manage debt. Having said that, don’t get back into the habit of not paying off the balance. Use this tactic for only a few months then revert back to paying off the balance each month.

12. Manufacture Positive Credit: The following technique is a powerful and effective way to dramatically speed up the positive evolution of your credit. It takes a small amount of seed money but may be well worth it if your interested in returning to an A+ credit rating (see below).

13. How can I dramatically improve my credit rating in a short time?

The following technique will enable you to speed up the positive evolution of your credit tremendously.

1. Go to your local bank and open an interest bearing savings account by depositing around $400 to $600. The more the better.

2. Go to the bank that you just opened an account with and ask for a relatively short-duration loan (around 12 months). Tell them that you want to pledge the money you deposited as security for the loan. Usually the bank will be glad to give you anywhere from 70%-100% of the amount that you have on deposit as a loan. Remember that this is a business deal and the bank is not doing you any favors: They are making money by charging you interest on the money you borrowed.

3. Since your original deposit continues to earn interest, this will partially offset the interest payments on the loan.

4. Take the money you borrowed from Bank One and use it to open a savings account at Bank Two.

5. Follow the same steps at 3 or 4 more banks. Use the money you borrowed from the last bank to help you pay the first few payments of interest and principal. .

6. Make sure you don’t get penalized for paying off the balance early. The longer you take to pay the loan off according to the agreement the better for your credit report. But you may want to pay the loan off early. Also, remember to emphasize to each bank that you want your payment history to be reported each month to the major credit bureaus. Make sure that your payment reports are being sent to all 3 major credit bureaus.

7. The above method enables you to manufacture positive credit items on your report and will significantly expedite your credit’s repair. The downside is that you will be paying interest on the money you borrowed. Fortunately, your interest payments are partially offset by the interest payments the banks will be paying you on your deposits.

14. Last, but not less, but most importantly…get this book…CREDIT SECRETS BIBLE.

* If you want to: improve your own credit scores so as to easily qualify for conventional financing:
* Negotiate down high credit card balances for .40 cents on the dollar, or less, while preserving good credit.

Then you will benefit from understanding how the credit game is played.

I’ve used the Credit Secrets Bible in my personal life, and I continue to recommend it to everyone I know! I believe in helping people empower themselves in every area of the market.