a friend of mine became unemployed for some time ago and she had to go through a pretty bad situation filed for bankruptcy, but now she is working again and making very good money, but she is trying to reestablish her credit back to a higher rating. how does one go about doing that in the most quickest and effective way? any tips would probably help others here who probably have gone through this in the middle of this bad economy.

Generally this will be on her credit rating for 10 years. She will need to establish credit somehow. A secured line of credit will help.

I don't know about quick - it takes time. Orchard Bank credit cards are a good card for people with bad credit. There are others but you have to be careful, many have astronomical fees & interest. LIGHT regular use of it, and try not to carry a balance of more than 5% of the limit. They also offer a credit-keeper service (as do others), and that can be very helpful in removing inaccurate info like creditors still reporting debts as outstanding that were charged off in the bankruptcy.

There was a time in my life where I was faced with a foreclosure. Nothing I could do would fix it. I simply worked hard, applied for and received a secured credit card at a high interest rate, and kept using it and paying it off. Within 3 to 4 years I was able to buy another home in only my name with no money down. It simply takes time and effort. She needs to make all her bill payments ON TIME and don't skip any. Before she knows it all will be well with her credit.

 

Or, You could take her in and just support her forever. She may choose option 2.

Bankruptcy is a joke. In 3 years she will be able to get any credit card.

 

Depending on how long it has been....

 

Option 1.

If someone adds her as an authorized user to their credit card.

 

Option 2.

Get one of those secured credit cards (Credit Limit = Amount of money put for security)

 

Option 3.

Get a secured loan from a bank. Open a CD for a $1,000, then get a secured loan for $1,000. Take it to another bank, Rinse, Repeat.

 

Once these good tradelines start showing.... Then apply for store credit cards. Places like Jared's do not even check credit most of the time and do their own in house credit underwriting. Had a client who had issues, get a $1,500 CL because they had a job, within a year, I think it is like $5k limit now, being reported.

 

Then, start cleaning credit, disputing "inaccurate" information, etc.

Bankruptcy is a joke. In 3 years she will be able to get any credit card.

 

Agreed. Maybe not even that long. It's amazing, you'd think the country would have learned something from the housing crisis (that really hasn't even hit rock bottom) but they are back to giving money out like it grows on trees.

You can get credit again once the bankruptcy is discharged. The down side is that you will pay a much higher interest rate. If she goes to buy a car, it's almost guaranteed that she won't get approved for a 0% apr offer, but will get approved for an 8-15% apr. cards like orchard bank and capital one will issue cards with $200-$300 credit limits at over 21% apr plus "membership" fees.

Bankruptcy is a joke. In 3 years she will be able to get any credit card.

 

 

Yeah, but try getting a home loan with a decent rate. Since I'm currently about to close on a construction loan that rolls into final 3.65 mortgage, they've put me through the paperwork ringer. All three of my FICOs run right at 800 and the amount of proof of this, that and the other thing has been insane. There were 21 pages of judgements against people with similar sounding names and different SSNs and I still had to sign an affidavit that they aren't me. Insurance, budgets, proof of capital, estimates, on and on it goes. Every day its something else. They are being so cautious right now that I'm quite sure a bankruptcy within 10 years would have been a disqualifier.

 

 

Yeah, but try getting a home loan with a decent rate. Since I'm currently about to close on a construction loan that rolls into final 3.65 mortgage, they've put me through the paperwork ringer. All three of my FICOs run right at 800 and the amount of proof of this, that and the other thing has been insane. There were 21 pages of judgements against people with similar sounding names and different SSNs and I still had to sign an affidavit that they aren't me. Insurance, budgets, proof of capital, estimates, on and on it goes. Every day its something else. They are being so cautious right now that I'm quite sure a bankruptcy within 10 years would have been a disqualifier.

 

I just went through the same wringer (thankfully I do not have a common name, so I didn't have to worry about deadbeats on my credit), and have excellent credit scores. Nearly every day I was forced to produce some new piece of documentation. It is the job of the mortgage underwriter these days to deny you. I can only imagine how it would be for someone who was out-of-work for a bit. What makes things worse is having less money to put down on a purchase because the home you are selling is underwater and you need to bring a fat check to closing on the sale.

I just went through the same wringer (thankfully I do not have a common name, so I didn't have to worry about deadbeats on my credit), and have excellent credit scores. Nearly every day I was forced to produce some new piece of documentation. It is the job of the mortgage underwriter these days to deny you. I can only imagine how it would be for someone who was out-of-work for a bit. What makes things worse is having less money to put down on a purchase because the home you are selling is underwater and you need to bring a fat check to closing on the sale.

 

The part that I've found completely insane is that the construction loan for our addition won't pay anything until the foundation and the rough framing are completed so I have to shoulder $40k up front before the bank drops a penny. They sure got their pound of flesh in fees months ago though.

 

It's a good thing I've been saving for 10 years for this thing, otherwise we'd have been sunk.

or.. try having about a month and a half of paychecks in cash and trying to pay down payment with that.. jeez.. they will make you get a loan to make sure you didn't get a loan for the cash...