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Better credit may come sooner after a Chapter 13 bankruptcy

After completing a bankruptcy in Washington or other states, the individual or married couple may have a difficult time obtaining a reasonable credit card and other reasonable extensions of credit. For a Chapter 13 payment plan, the negative report of a bankruptcy can remain on one's record for up to seven years after discharge. There are many ways to build up one's credit rating, however, and in some instances, it is found that the bankruptcy itself ceases to be reported at some time less than seven years. In any event, with focus and some hard work, one can restore a very respectable credit score within a few years after the discharge.

Experts recommend that a person coming off a bankruptcy obtain a secured credit card. These cards take a deposit of money held in security to cover payments on the card. They will have high interest rates. The card is recommended because in the early stages the interest rate is secondary to building up positive notations on the credit record.

It is highly recommended that a person does not carry a balance on any credit cards obtained after the bankruptcy. Keeping a high balance shows that the person is still struggling to make ends meet. Another way to increase the credit score is to pay on a car loan faithfully. If the loan was retained in the bankruptcy and paid all the way through, all the better. The same applies to a home mortgage, which is often paid during and after the bankruptcy without fail.

Those secured accounts paid during and after the bankruptcy give one a head start to new credit horizons. As time moves forward and the individual demonstrates an unshakeable payment history and no high balances, the walls will begin to melt quickly, and the score will begin to climb back up. Remember that a person does not come out of bankruptcy in Washington or any other jurisdiction with no credit prospects, it is just that the terms provided will not be good. As one builds a track record, all those kinds of obstacles will begin to fall away.

Source: nj.com, "Can I fix my credit score after bankruptcy?", Karin Price Mueller, April 20, 2018

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