How to Restore Credit After Bankruptcy

While bankruptcy can have a negative impact on your credit, it also increase your credit because once you filed a Chapter 7 bankruptcy, your debt-to-income ratio will significantly increase. This is due to the fact that you no longer have old debt and more money can be used to pay new debt.

You can start rebuilding your credit by finding out the duration and type of your employment. It will be much less difficult to get new credit if you worked at the same job for a long period of time. However, having your employment history is only the first step in credit rebuilding.

You must remember the reason for filing a bankruptcy. If it’s something justifiable, for instance, illness or divorce, then you can still get a new credit. On the other hand, if it’s because of compulsive spending, gambling, drugs or alcohol, then you must first deal with these problems, otherwise, you cannot be a candidate for obtaining new credit.

After that, you can apply for a secured credit card, where you can put in money with a lender as security and the amount of deposit will also be your credit limit. A debit card is different because it has no credit lending component or credit history rebuilding record.

Furthermore, pay your current debt on time, for example, installment loans you might not have paid completely. This is very important, especially with secured loans like auto or mortgage loans, because every on time monthly payment will be reflected in your credit history and reported to the credit reporting agencies. Consequently, it will help in increasing your credit score.

Later, you can also get a store card from gas firm or department store, but keep in mind to use revolving credit casually and frequently.

The combination of credit cards, installment loans and store cards used and paid on time is one of the best ways to rebuilding your credit after a bankruptcy. It can be achieved for a couple of years, together with a decent employment history.

Start Being Wary of Your Credit Now

It is vital that you get to make it a yearly habit to log in www.annualcreditreport.com or call 877-322-8228to get a copy of your credit report from Experian, Equifax and TransUnion. Most especially, you have to keep a close eye on possible typo errors or transactions you have already settled because these mistakes in the recording often result to bad credit for most people.

You probably already know that bad credit prevents you from buying that car you always wanted, it is difficult to get a loan for student aids or for starting a business, and most especially it is difficult to get a great deal for a house or an apartment. It does not stop there; bad credit also affects what kind of job you can get.

No one is safe from bad credit, even if you are among those individuals with spotless credit because you can manage to pay your liabilities without delay and you think it would be pointless to check on your credit report because you have been a good client. But that is a very bad assumption. The credit reporting companies may make mistakes in their reporting; they may even fail to record your payments in some bills. Or worse, you might be an unknowing victim of identity theft. If you do not check your report you may find it out too late and you will suffer the consequences.

If you find any errors in your report here is what you should do:

Send a letter addressed to the record company, in the letter include what errors or problems you have and politely ask for the company to correct them. You must encircle the item you believe may be incorrect and include a copy of a receipt or any evidence showing that you have cleared this. Never forget to include a return receipt request.

3 Tips on How to Assist Your Child Build Credit

Most parents would probably just ignore the topic of credit, but there are some parents who value the significance of assisting their child build their credit. The following are three tips on how parents can help their child build credit.

First, open a debit card and checking account. Although having a checking account and debit card will not technically increase the credit score of your child, the first thing to building a good credit score is having solid money management skills. When your child understands how to use their money wisely and to keep away from declined debit card charges, they have learned the fundamental skills of reliable credit card use.

Second, parents can put their child as an approved user of their credit card. It will have no effect in your credit score, however, provided that you keep low credit utilization and make on time payments, the account will also appear on the credit report of your child and increase their score. While you can opt not to permit your child to use the credit card to buy things, but at least teach them that it is important to make full monthly payments.

Third, assist your child in applying for a student or secured credit card. Even if the most recent financial policies have become stricter in giving credit cards to young adults, having an appropriate part-time job and the support you’ve given by adding your child as an authorized user of your credit card, your child will be able to look for the best credit card and even without your co-signature, get approved.

Both student credit cards and secured credit cards are good options for those who just started building their credit because the two cards are intended for those with imperfect credit histories and there is a higher possibility of getting approved. Preferably, get a credit card with no fee to pay every year.

Five Ways That May Decrease Your Credit Score

People with low scores usually tend to pay higher interest rates on their loans. However, a lot of people are not aware of what actions are good or bad for their credit scores. The following are five ways that might have a negative impact on your credit score.

First is avoiding credit in general. Although it makes sense not to have debt, lenders actually want to see that you have experience in terms of handling debt, specifically, that you can keep up with the monthly payments, prior to giving you their approval for the loan.

Second is closing your credit card accounts. In reality, lenders want borrowers with experience in long-held accounts. Keep your paid-off credit cards because it shows that you can handle credit even for a long time.

Third is decreasing your credit limit. Spending your credit up to its limit reflects that you are not credit-worth because you are using your total available credit.

Moreover, having your overall debt near the credit limit might decrease your credit score. On the other hand, people with high credit scores only use more or less 10 percent of their total credit limit.

Fourth is opening a new retail card account. While it might a good idea to get a department store card in order to have a 10 percent discount, it can mean that you are dealing with excessive debt. As a result, lenders might reject your loan application.

Fifth is keeping a small credit card balance every month. One of the reasons for more debt, together with interest and fees, is paying the least amount on a credit card, or not paying in full. It’s better to pay your debt on time and in full.

It is important to be aware of these misconceptions so that you will not be confused about your credit report. According to a survey conducted by ING Direct, only five out of 1,042 parents know that some actions, such as closing credit card accounts and having zero credit, as harmful to credit scores.

Consumer Car Buying Advice Blog – Credit Loan Inquiries

The Service Contract Industry Council or the (SCIC) an organization group which represents almost 80% of the total providers of contracts for appliances, electronics at home and auto services in the United States has released tips for consumers. This press release include the things that consumers should consider in buying extended car warranties or a service contract for brand new vehicles and used ones.

The script seeks to remind clients that they should read the provisions of their contracts very carefully and thoroughly understand all the limitations and inclusions. Another thing you should always keep in mind is to keep evidence of your transactions; these include the paper works, receipts and other records. Furthermore, you should follow the conditions of your manufacturer’s in your car’s maintenance; if you do not it could be a serious breach in your part of the contract.

It is also very important for clients to know the basic information of the manufacturers’ service providers such as the name and contact number. If these are not provided in the contract then you should notify the Department of Insurance or the Better Business Bureau because the company may not be authorized to sell you vehicles.

The script also includes tips for consumers such as being aware of the depreciation or the wear and tear provisions of the company’s warranty; these may include number of years or miles. Another tip is that the consumer has a 30 day “free look” period where in if they think they did not get the right value for their money they could return the car contract and get a full refund.

You should also keep in mind that you should not buy a contract if the company will not disclose a copy of the terms or the conditions for the purchase. And finally, you should be wary of providers that would always use mass marketing techniques.