Well I have been discharged for 2 weeks and wondering where to begin. I am wondering how long to wait before getting credit report? As well can someone explain the benefits of a secured loan?
-
-
Now is a good time to start reviewing your credit reports. You want to make sure the accounts report as "included in bankruptcy" with a $0 balance. There should be no late payments after your filing date. Anything that does not properly reflect this should be disputed.
As far as a secured loan -- the value of this depends on what will be reported on your credit report going forward. For example, if you reaffirmed an auto loan or mortgage, I wouldn't bother with a secured loan. If you have nothing reporting, think of yourself as an 18 year old. Without payment history (after discharge) your risk level is unknown.
Additionally, part of your credit score is determined by your credit mix -- the variety of types of accounts you have. If you only have credit cards, your mix is pretty lacking. Some loan officers also like to see history paying back similar products (e.g. on-time payments to personal loans are more like paying auto loans than credit cards)
Finally, the credit union that I work for looks for three tradelines with a minimum of six months payment history before they considered someone "reestablished." Other banks/credit unions will have different criteria.
For all of the above reasons, people rebuilding after bankruptcy will often consider a secured loan as part of their credit portfolio, in an attempt to increase their credit scores and qualify for future credit (e.g. auto loans). If you already have loan(s) reporting post discharge, I wouldn't bother with a secured loan.
Comment