Have You Gone Bankrupt? Here is How You Can Rebuild Your Credit

Have You Gone Bankrupt? Here is How You Can Rebuild Your Credit

Do you declare a death sentence to your credit card score when you file for Chapter 13 or Chapter 7 bankruptcy? No, you do not! You can still rebuild your credit card score. Even though it may look like a daunting and impossible task, especially when you look at your credit card score after a bankruptcy filing, know that it is not impossible to restore it.

How Badly Does Bankruptcy Affect Your Credit Card Score?

Lenders and banks analyze a person’s credit card history to decide if they qualify for a loan and the type of interest rate they should set if they decide to provide them with one.

Here is an example on how bankruptcy plummets your credit card score:

If your credit card score was 780 before you filed for bankruptcy, after it, your credit card score will be between 540 and 550. If your credit card score was 670, it will be between 140 and 180 after bankruptcy filing. For lenders, a bad credit card history marked with bankruptcy is a red flag. Does that mean you will never be able to secure a loan?

You can take the following steps to fix your credit card history:

1.      Examine Your Current Credit Card History

You can obtain access to free credit card reports from various sites. If you do not know what you are doing, you can visit an accountant or someone with the expertise of analyzing credit card history. You need to examine your credit card report for inaccuracies. If you find any, counter them and correct them.

2.      Examine Your Credit Card Score

You can obtain access to your credit card scores from the internet. You should keep a record of your credit card score each month. Do not look at several types of scores to track, but look at the same credit card score each month. You need to know which type of score your lenders will look at when you apply for a loan, thus it is important to track your score and clean your credit card reports.

3.      Provide Assurances to Lenders

Lenders will see you as a risk, a liability— a person they cannot trust to repay them in full. To assure them that you are not a risk and they should invest in you, you need to provide them with additional assurances. Here are a few ways you can use to assure your lenders about your ability to repay them:

Secure Loan– Credit card unions and community banks are two types of entities that can provide you with a secured loan.

  • Deposit money, but cannot access it
  • Loaned money is placed in a savings account and released once the required payments are made

Secure Credit Card– The deposit you pay backs up the card and limit is the amount you paid.

Co-signed Loan or Credit Card– Ask a family member or friend with a good credit card history to become your co-signer

Authorized User– Ask someone to make you an authorized user, but ensure the credit bureaus receive your payment activity

Do not give up hope! Rebuild your credit card history!

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How to Protect Your Investments

How to Protect Your Investments

The financial market in the United Kingdom has hit a hurricane after the recent geo-political alterations. Even if that is disregarded, there are several things that threaten the investments of people throughout the year.

Such threats include political uncertainty, fragility of the financial markets, cyber risks and many more. In order to help you protect your investments from such threats, we have summoned up a list of strategies.

Release the unsystematic risks

There are two main categories of risk, the systematic and the unsystematic. Unfortunately, there is not much you can do to erase the systematic risk but you can surely eliminate the latter with a few tricks. To start off, it is better to go for a portfolio that includes a large number of stocks. This will help in reducing the amount of unsystematic risks in your investment.

Return on Capital

A great way to protect your investment is to opt for ‘safe investments’. Whether it is income annuities or cash, both will help provide safety for your investment. However, the protection of your investment in this case will be short-term.

Diversification

A very simple and expert way to protect your investments is through the concept of diversification. This has long been used by investors to make sure they don’t lose their money if a certain investment fails to perform. Basically, you are not supposed to put all your eggs in one basket.

By owning a broader and diversified portfolio in a particular asset class, the investors consequently protect their investments and reduce the otherwise growing unsystematic risk.

Stop losses

Stop losses is one of the best ways to secure your investment. It provides protection against the rapid changes that might occur in the financial market. Although it helps in this regard, there is ample need to plan out the stop losses before you go through with your investment strategy. It must be noted that the key point here is to stop the small temporary losses from turning into big permanent ones.

Principal-Protected Notes

One of the several ways to have your principal amount protected is to go for Equity Participation or Principal Protection Notes. These notes are similar to bonds because they secure your principal, provided that you hold the notes to their maturity. Investors that are reluctant to taking risks are bound to find the Principal Protected Notes quite attractive. However, you must not jump into it right away. It is better if you first find out the financial position of the bank you are buying these from, to further secure your investment in them.

Limit the Exposure

It is sometimes wise to limit your exposure in the financial market and step back on the level of risk you are taking. If you have invested somewhere, that does not mean you are bound to stick to it, provided it binds you legally. Whenever there is a lot of instability in the market, you should consider repositioning some part of your investments towards a lesser risky area, and lessen your exposure to the volatility of the market.

There are a lot of ways you can protect you investments in the market. The key here is to educate yourself with the possibilities of what can be done with those investments.

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