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James improved his credit after declaring bankruptcy and found a loan to fit his financial situation.
Read his story.
Module 2
How Credit Affects You
Bankruptcy
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ASK THE EXPERT: Re-establishing Credit after Bankruptcy edge

Dear H.O.M.E. Expert,

I filed for bankruptcy a year ago. Since then, I’ve been working hard to manage my finances. I want to begin building a positive credit history so I can buy a home some day. The only credit card offers that I receive have very high interest rates. I know I need to re-establish credit, should I apply for these cards?

Signed,
Recovering from Bankruptcy

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Dear Recovering,

Often a secured credit card is the best first step for someone who has recently had his or her bankruptcy discharged. If you're still going through the bankruptcy and a secured card isn't right for you, consider opening an account with a credit union. It may be easier to establish credit this way.

Also be sure to pay all your current bills on time. It’s the best way to build a positive credit history. Try to keep all of your current non- housing debt below 20% of your income. Create a budget and stick to it, to make sure you don’t overspend.

If you follow these guidelines, you’ll be on your way to establishing better credit and becoming a homeowner. You should be able to apply for a home loan in as little as two years after your bankruptcy is discharged. Good luck!

Signed,
Your H.O.M.E. Expert

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Helpful Links

Sites with More Information
To learn more about bankruptcy, visit the following sites:

DebtAdvice.org
National Foundation for Credit Counseling Bankruptcy Information
National Foundation for Credit Counseling

These helpful links are also available in the Resources area.

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