Fast Loans - Personal Unsecured

Rebuilding credit after a bankruptcy is not as difficult as it sounds. The bankruptcy will remain on your credit report for 10 years but it is important to know, that over time, its the behavior you demonstrate after the bankruptcy that will have a greater impact on your FICO score. So whats the best way to start rebuilding credit?

A quick and effective way to put a positive mark on your report is to obtain a personal loan from your bank. Obviously no banker is going to grant a loan on your signature immediately after a bankruptcy. There is however, a win win scenario but it requires that you explain your situation.

With the fresh start that bankruptcy provides you should be in a better cash position. Make it a priority to save $1000 as quickly as possible. Once you have accumulated the cash, make an appointment with a loan officer at the bank where you have your checking account. Explain that you are sincerely trying to improve your credit report and that you would like to take out a 6 month personal loan for $1000. Further explain that you will buy a $1000 Certificate of Deposit from the bank to serve as collateral for the loan.

What you have just proposed is a no risk $1000 personal loan that the bank will earn interest on. In addition, the bank sells a $1000 Certificate of Deposit. If banks were offered these kind of deals all the time, we wouldn’t have to send tax dollars to bail them out.

Use the $1000 from the loan to open a savings account and use that to pay back the loan. Your credit report will almost immediately show the bank loan which by itself is a good thing. Using the savings account, pay back the loan on time each month for the term of the loan. Now you have a new account with timely payments and all it has cost is the interest on the loan.

At the end of the loan you may want to consider repeating the process. At the very least ask your banker to make a recommendation for a secured credit card. If his bank provides that service make sure you can afford the fees and make sure the bank reports it as a standard credit card and not a secured card.

These are small but necessary steps in rebuilding your credit after a bankruptcy. You’ll discover, providing you pay your bills on time, that your FICO score will improve dramatically over the first 9 months as it projects your behavior based on a responsible history, not just the bankruptcy.