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Question for the Money Doctors

Question submitted on Jul 23, 2013.

Question

Hi!

I''m finding that I need to start rebuilding my credit. I filed bankruptcy in Feb 2009, and have not had any revolving or consumer credit of any kind since then! I took the opportunity to lock one of the three credit agency''s down to prevent trolling from undesirable businesses, and have not been asked “whats in my wallet” since then! Now, living just on my paycheck is not a problem, except when a unexpected issue comes up, like major auto repair. So my question is, what would be your suggestion for a positive credit building approach? I''m unwilling to pay 40% interest to some charge card gouger just because of my past, especially with the federal reserver charging 0% interest on money to the “big banks”. I belong to a credit union, and because of that, have some additional flexibility that might not be available to others. What do you suggest?

Thanks!
Ron Malloy

Answer

Good luck Ron with rebuilding your credit. It will take some time, but it is possible.

You will need to show that you are no longer a credit risk to any lender.

This means paying all your bills timely.

If you are renting and you are paying your rent timely - that can help rebuild your credit. Generally there is nothing you need to do if you are renting from a large national property manager&ampnbspsince they may be reporting to the credit bureaus. Smaller landlords generally do not devote any resources to this. There are services available to tenants that help rebuild your credit, but beware of the fees charged and shop around. These services require you to pay the rent to them and they deposit into the landlord''s account. After 4 months, they report this information to the credit bureaus to help you rebuild your credit.

I do not recommend incurring debt just to rebuild credit, but paying off your bills every month is going to help.

This would include your telephone bills, cable bills, utilities, car payments, etc.

If you have a tough time getting credit cards, you can get a secured credit card at your credit union. Your credit limit may be limited to the amount of money in your account.

Please contact your local Consumer Credit Counseling service and they can review your situation in better detail and give you helpful tips.

Good luck!


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