After a bankruptcy, the last thing you may be thinking about is getting another credit card or loan. What you need to know, though, is having a credit card is extremely important to rebuilding your credit, especially if you plan to apply for a mortgage.
Re-establishing your credit let's the lender know that you can handle your financial responsibilities. No credit means you will have to opt in at a higher rate and a condition for a higher down payment.
Here are 4 steps to rebuilding after a bankruptcy or proposal
1. Make sure to order a copy of your credit bureau to ensure your discharge date is shown.
2. After your bankruptcy or proposal is discharged, you will need to obtain two new trade lines reporting at a date after your discharge date.
What is a trade line?
"Secured" Credit Card (Pre-paid credit cards are not considered a tradeline)
An Investment loan
A Car loans
A Furniture Loan
3. Your two new trade lines will need to be established for 24 months after your discharge date and paid back flawlessly.
4. All collection and judgement items must be reporting as paid with a $0 balance.