The decision to file for bankruptcy is a tough one. However, clearing up the financial mess is not easy for many unless they choose to file for bankruptcy. Once you have repaid your dues as per court-mandated programme, you get a clean financial slate, meaning, you can easily start over. It will be surprising to know that soon after their bankruptcy is discharged, many debtors start receiving calls from credit card companies, mortgage finance companies or car loan lenders, offering them a variety of credit offers. It will be surprising to know that many of these creditors are subprime lenders that are interested in preying on people who have just cleared their bankruptcy-related dues and wish to improve on their credit score.
How to Avoid Subprime Lenders?
As per Sacramento based law firm, Recovery Law Group, you can easily avoid getting hammered by subprime lenders by using these tips –
- Keep your credit report updated. Few months after bankruptcy, your credit report should reflect that your dis-chargeable debts are actually discharged. In case it is not being shown, contact your credit bureau to amend it. An amended and updated credit report will attract better quality lenders.
- Take baby steps to improve your credit rating. This can be done by paying your existing bills on time; any bills that continue after your bankruptcy (rent, mortgage, car notes, ) need to be paid off on time to create a new payment history. This will reflect well on your credit report giving you leverage to negotiate a better deal with lenders.
- Create a new account of revolving credit access by getting a secured credit card. It is important to pay any dues on this credit card every month. Avoid using it as a source of cash or you will end up in the same place as before. Use the card carefully and cautiously to prove possible lenders of your attempt in proper management of credit line post-bankruptcy.
- Always read the fine print associated with any document. When applying for a new credit line, make sure you read all the terms and conditions mentioned. Despite offering some good deals on the surface, many credit card companies charge extreme fees and have many conditions attached which may harm your credit score in the long run.