Now that youve erased all of your bad credit, youll want to start rebuilding your credit. To your amazement, flyers keep coming in the mail offering you credit cards, car loans, even mortgages. As tempting as it may be to jump right back into debt, youre better off starting small and choosing your lenders wisely. Predatory lenders will attempt to prey on your previous misfortunes. Before you attempt to start rebuilding your credit, read this article, and learn what you need to watch out for in order to keep your credit in good standing: Credit Cards with Outrageous Terms If you thought that youd never get approved for another credit card again, you might jump at that first pre-approved application that arrives in your mailbox. But before you decide what credit card is right for you, do some research. The Internet is a great place to compare credit card offers, and you would be wise to utilize it. Dont apply for cards with high interest rates, low credit limits, and high annual fees if you can get a different card from a reputable lender that will offer you better terms. Reputable lenders also report to all three major credit bureaus monthly, so theyre better sources of rebuilding credit. Buy-Here-Pay-Here Car Lots Dont feel flattered when a buy-here-pay-here car lot offers you a loan. These people will loan money to anyone. Even worse, they charge high interest rates, and they usually only carry used cars in less-than-perfect condition. However, this wont stop them from charging an amount that is significantly higher than the blue book value of the car. Between that and the high interest rate, youre destined to end up upside-down in the loan. The best you can hope for from these dealerships is that you get a car that lasts long enough for you to pay off your loan. Additionally, in general, these dealerships only report to credit bureaus when you default on the loan. Here is a list of recommended Auto Lenders online. It's important to use a reputable lender online to make sure your personal information is secure. Sub-Prime Mortgages If you can, wait a couple of years after your bankruptcy has gone through before you apply for a mortgage loan. If you start small and prove that you can handle your small debts, within two years you will likely be able to qualify for a mortgage that is not sub-prime. This means lower interest rates. On a home loan, an interest rate that is even one point higher can cost you thousands of dollars of the life of the loan. |
