Rebuilding your credit when bad credit gets you down
Coming from someone who has been there, I can tell you first hand that bad credit takes time and responsibility to repair and rebuild. In 1999 I filed bankruptcy after losing my job and tons of medical bills from a car accident. My credit was shot, I barely had any money and couldn’t get a car loan for less than 18%.
Immediately after filing bankruptcy I new that I would need to rebuild my credit right away, to get my credit scores up as the years go by. The first card I applied for was the Orchard Bank Classic. They gave me a small initial limit ($300) but they reported to all 3 credit bureaus and helped establish my credit by paying on time.
After a few months of paying on time, I decided it was time to get a bad credit auto loan. I was approved for a car through Instant Approval Auto Loans and my rate was a bone crushing 18.99%. They told me to pay this for six months or so and refinance for a lower interest rate. I did exactly that, and after approximately 8 months I refinanced my auto loan down to 12%. I was making progress and my credit score was getting better.
At this point I am about 18 months post bankruptcy and I have 2 solid tradelines one from a credit card and the ever important installment loan. I am back off my feet and I have a solid job, my credit is looking on the up and up, and mortgage interest rates are at an all time low. I come to find out that I can qualify for a conforming home mortgage after 2 years post bankruptcy, this is great as rates are in the 5.75-6% range! If your shopping for a home mortgage, whether its for good credit or bad credit, I used and recommend LendingTree.com? they can find lenders that aren’t as strict as your regular state bank or national bank.
I look for houses and find the one I like. My mortage broker pulls my credit and my scores are all in the 660-680 range which is pretty good post bankruptcy. I end up getting a home mortgage for 6% and I am ecstatic. I have a bankruptcy and can still buy a house with a low rate like that.
Refinance – Consolidate Bills – Get Cash Out
Home Improvement – Buy a Home Lending Tree.com
As of now, my credit scores are between 690-740. My bankruptcy is 7 years and 1 month old and I have 5 platinum cards, a low interest rate on my house, a low interest rate on my car and a good paying job. Yes it took time, and a lot of responsibility, but the rewards of not getting said “no” to anymore feels better than anything else in the world.