After bankruprtcy how on earth do you rebuild a credit score?

Question

How can you rebuild a credit score when your not allowed credit?? i can't even have a mobile phone on contract! service i now use is on pay as you go cards,phone,elec,council tax etc.. I don't want to borrow money even if I could. I have been out of my bankrupt period for over 6mths now
It's impossible to open bank accounts even though the law says your allowed too. I have had info on opening several accounts and sending money between them on a regular basis, which would work if I could have more than one account???
Any helpful info. would be great.
I have tried the internet and cannot find a website that offers help.
For anyone who finds it amusing leaving p!ss take info. I hope you end up bankrupt that will tickle me.
Regards

I forgot to say that I have a bank account although no cheque book! I sourced a prepay credit card a few months ago, anyone reading this that may need one goto cashplus on google-it's a life saver which has made life so much easier I can use the internet, pay for petrol on it etc..
Nationwide have been great! If only I had of banked with them and not HSBC I would not of gone into voluntary bankruptcy It was only them I owed through their outrageous charges, when my business hit a flat spot they pounced! nice I had a business acc. with them for over 10 yrs. I have learnt a lot over the last year and hope that I can help any body with my experience, like wise any help from anyone would be appreciated.
Thanks

Answer 1

Yup it's tough, but having been in your (incredibly frustrating) shoes - I can pass on a bit of (hopefully) helpful advice.

For a 'proper' current account with a cheque book - forget it - for now. Get a Cashminder account with the Co-operative Bank, you get an electron card, can set up bill payments, direct debits, and standing order etc - just no cheque book, they are REALLY nice people. After a couple of years or less of 'good' behaviour on this account they are normally willing to upgrade you to a full current account. www.cooperativebanking.co.uk has the number to call for an application pack.

As for a credit card to rebuild your credit rating look at something like a Capital One credit card - as a discharged bankrupt, you will be asked to provide a deposit - sometimes up to £200 and the interest rates are a bit outrageous, but you can just use it for one thing a month like petrol, and pay the bill off in full, this will help rebuild your credit rating.

It may also be worth getting a copy of your credit file from Equifax/Experian and making sure that all the people you previously owed money to have updated the accounts as settled via bankruptcy. You can get more advice on this from www.equifax.co.uk and www.experian.co.uk, or try your Official Receivers office for some advice.

Good luck, you will get there x

Answer 2

I had just gone through that a little over a year ago now and have learned a few things. first everytime you apply for something and they run your credit it counts as at least 5 points negative on your score. and that every month you keep things off your credit that your score goes up also after bankruptcy get copies a couple months afterwards look and make sure everything was taken off your credit that means the name will show for debt owed but balance will be 0 dollars and showed filed in bankruptcy. On one of the companies it took me 3 months of disputing to finally get them to get that stuff off there. But then score goes up. As far as banks go it will take time too. I don't know what state you are in but i'm in wisconsin and the law here is no bank or anyone will help you for 2 years with a loan or anything. So I hope all that has helped you and good luck. Start with a saving acct and anytime you will be getting ads in the mail about credit cards maybe a little higher on the interest but you might have to start out that way to help rebuild.

Answer 3

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RE After bankruprtcy how on earth do you rebuild a credit score?

How can you rebuild a credit score when your not allowed credit?? i can't even have a mobile phone on contract! service i now use is on pay as you go cards,phone,elec,council tax etc.. I don't want to borrow money even if I could. I have been out of my bankrupt period for over 6mths now
It's impossible to open bank accounts even though the law says your allowed too. I have had info on opening several accounts and sending money between them on a regular basis, which would work if I could have more than one account???
Any helpful info. would be great.
I have tried the internet and cannot find a website that offers help.
For anyone who finds it amusing leaving p!ss take info. I hope you end up bankrupt that will tickle me.
Regards

Answer 4

Been there. I actually went without a checking account for a while and just paid a 5 dollar fee to cash my check at a nearby bank, and bought money orders to pay my bills. I couldn't get an account because a creditor was garnishing my previous account, so I closed it. Once the bankruptcy was finalized, I opened another account at the same branch with no hassles. Bankruptcy shouldn't stop you from having a checking account unless you filed bankruptcy against the bank itself. I don't understand why you can't.
Also, as soon as I finalized my bankruptcy, I was flooded with credit card offers in the mail to help rebuild my credit. I was advised to get one of them, charge 100 bucks, and pay only the minimum payment amount each month, so they make interest off of me, and then I build credit.
I sure hate money!! So sorry you are in such a bind. Try US Bank if there is one near you. They are great.

Answer 5

Not long ago (and I don't remember where I heard this - it was television or radio or maybe I read it on some finance site online), I heard that because the person who files bankruptcy usually will not be filing again (ever, most of the time; or in a long time, occasionally) that some creditors are actually interested in lending to the person who just finished with bankruptcy (but I don't know if they meant finished filing or finished with whatever process goes on before its all over).

I would think that for now all you can do are things like the following:

Keep the secured credit card you have. Keep it in good shape. See if either they'll increase your limit beyond money you have in or if you could get another secured card that allows you to move out of secured (or at least past the initial deposit) and into a more "regular" situation.

The pay-as-you-go phone cards may have to be ok for now. Are there any companies that (like Cingular in the U.S.) offer a more generous plan?

I don't understand exactly what you're doing with the bank accounts. I think I may have an idea. Do you mean open an account, ask for a personal loan with the balance as collateral, and then take what you've borrowed to open a new account and do the same thing (in order to establish a payment history)?

Are there any online banking places where you may be allowed to open an account?

I don't happen to know of any sites online that could tell you much of anything, unless you could do a search like, "bank accounts for people with a bankruptcy" or "bank accounts, bankruptcy ok".

It would seem to me if you can get (and manage well) a secured credit card or two you would be able to establish a payment history. It may take six or eight months, but I suspect once you go for a few months with the cards you'll start to get offers for other cards. The offers come when your name is on the right lists or when some marketing person looks up who has the secured card.

It would seem to me if you can build up a savings account (for possible future use as collateral if necessary), get a couple of secured credit cards to start with, and have one bank account for now. Six months isn't very long when it comes to filing bankruptcy. It may take you another six months or so to start to really rebuild.

I can't be positive, but as with financial difficulties, building credit can snowball too. It may seem crummy that you may have to settle for a couple of secured cards, but it probably won't take all that long for the snowballing to pick up when it comes to your credit.

I don't know if anything I've said is a shred helpful or not. I suspect it wasn't. Nonetheless, nobody I know finds your situation the least bit amusing.


Extra note: I noticed what someone said about the low-limit credit cards. I know they aren't "real" credit, but they get your name on lists for offers; and if you manage them well you can get some good offers. Yes, they're high in fees; but what are you going to do...

Answer 6

I was in so much debt---I had zillions of credit cards and they were mostly over 10K credit limit when my job suddenly closed--that left me filing bankruptcy--I still own my home and still receive many many offers for credit cards but I have learned a valuable lesson that nothing in life-no matter how long you believe you will have a job-is guaranteed---you will begin to get offers in the mail--if you think you need a credit card then answer one---I personally think cash is the best way--if you can't afford it don't get it---I even helped pay other peoples debts and bought them things on my cards--they never paid back---be careful or you will fall into the same situation---I personally think getting a bank loan or credit union for a home equity or a vehicle is the way to go--that builds your credit and it is payable early usally with no penalty---or get a loan for a house and use it for rental income--that is always great as it boosts your income and is always there to fall back on---you could always sell it if you get in trouble. Good Luck but remember life is a learning lesson and you do not want to be in the same situation you were that got you here.

Answer 7

Willow, my heart goes out to you. I've been through bankruptcy and it's awful, to say the least. You'll hear no unkind remarks here. So many people think the only way you end up going through bankruptcy is due to going on a wild spending spree...WRONG.

We had an established business back in the 80's and when the economy went bad, our customers didn't and couldn't pay us.
It was humiliating and very emotionally stressful. You've received some very good advice here and some that I raise an eyebrow at.

I truly believe you need the advice of an expert and Dave Ramsey has been mentioned here in several responses. He is an expert. He has been through it and now a wealthy man. His talk/radio program is so helpful to many.

I know he would not tell you to get credit cards !

But he can tell what steps to take to get your life back.

I'm listing a toll free number for contacting him. I hope you can get the answers you need.

God Bless You

Call our office at 888/227-3223 or e-mail us at [e-mail]

Answer 8

OK.this is part of what I do for a living!! So listen up!!
You can only re-establish credit by obtaining a non-revolving (installment) loan..which for most of us will be an auto loan. (Mortgages, boat and RV loans will also help, but mortgages don't work fast enough and if you are just out of bankruptcy you shouldn't be looking to purchase a boat or rv!!). Of course, you must then pay it off 100% on time. You must realize that any bank that would give you a car loan will be one that specializes in people in your situation, and the interest will be high. But hey..you went belly up right..I mean noone held a gun to your head.
As far as credit cards, you will be amazed at the amount of offers people receive post-bankruptcy for them. Most are "secured" or have high sign-up fees. The problem with these is that only a "major" credit card (minimum of $1500.00 credit line) counts for much in your credit profile. It will take years for these $500.00 +/- cards to increase your limit to where it will actually help your credit score. So what these cards do is basically give you a "little taste" of having credit while charging high interest and fees and giving little help in ever improving your situatuion.
Your inability to open a bank account is probably more concerned with your having overdrawn a previous account and not paying the accumulated fees or having outstanding bad checks. Remember, just because your bankruptcy was probably unchallanged doesn't mean that creditors don't have other means to penalize you.

Answer 9

An attorney posted this information at his blog:

"1. Consider opening a checking and savings account. Some lenders look at this to determine if you can responsibly handle money. Being able to pay bills from a checking account is much more convenient than paying with money orders.

2. Consider applying for applying for store and gas credit cards that you would normally pay cash. These cards usually have small limits and can help you restore you credit if you have the discipline to set aside the money to pay the bill each month.

3. Consider applying for a secured card where you deposit cash and charge against it. If you borrow money for short periods of time and pay it back, this will reflect positively on your credit report.

4. You MUST pay your utility bills and rent on time for at least a year.

5. If possible, find a friend or relative to cosign for you on a loan and pay it on time.

6. Look for car dealers and mortgage brokers that attest to be "bankruptcy friendly". Buy a used car so you do not get hit with the depreciation that occurs during the first two years of a new car purchase.

7. Stay away from payday loans that are at high interest rates and are a bad credit trap.

8. Write a letter to each credit reporting agency explaining the circumstances that lead to you filing.

9. Live within your means. Do not unnecessarily increase your debt to income ratio by taking on credit to purchase luxury items that you DO NOT NEED. Your payments on consumer debt should equal no more than 20% of your expendable income after costs for housing and a vehicle.

10. Pay your reaffirmed, pre-bankruptcy debts on time."

Answer 10

The best way to rebuild your credit is to start paying your bills on time. A credit score is based on credit worthyness. A bankrupsy is a fresh start. First you can open a secured credit card. get a car loan, or a small personal loan say you put 5oo in the bank and then you get a loan for 500 that shows on your credit. Good luck o and car loans you can get them fast