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Building credit following bankruptcy is difficult, but it’s not impossible. Having a bankruptcy on your record means you will end up paying more to borrow money, as you are now considered a subprime borrower. Being classified as a subprime borrower means you are a high-risk borrower, so lenders will charge you higher interest rates and penalties for defaults.

Restoring your credit rating
As a bankruptcy consumer, you need to pay close attention to your credit report and credit scores. First, you need to obtain a copy of your credit report from all of the major credit reporting institutions, including Equifax, Experian and TransUnion. You need to analyze these reports for errors regarding your residence, employment, and personal contact information. You should also make sure your pre-bankruptcy debts are recorded as “included in BK.”

Securing a credit card
One of the easiest ways to begin rebuilding your credit is by opening a secured credit card immediately after your bankruptcy discharge. You can fill out an application at your bank and make the initial deposit into your secured account. Your bank will provide you with a credit card and a credit line of 50 to 100 percent of your deposit. Usually, your bank will pay interest on your deposit.

Purchasing a home or car
Your ability to purchase a car or house following bankruptcy depends on the lender. However, it will likely take 18 to 24 months before you can secure a mortgage loan after personal bankruptcy discharge. When you do secure a loan, you should be prepared to pay interest rates that are two to three points higher than conventional rates. You can also find out how your credit scores will impact your loan interest rates by using the loan savings calculator on

The Aurora bankruptcy attorneys of Cutler & Associates, Ltd. can help you understand your options when faced with foreclosure, lawsuits, job loss, and large credit card debt. We also offer free over the phone bankruptcy consultations with a Chicago bankruptcy attorney. To find out more, please call us at (224) 836-4956.