There is life after bankruptcy. It just may be a bit more difficult to financially maneuver. Many times, you have to move to a new home, sell some of your new furniture or return it with a significant penalty or worse – repossessed. Your life and home life can be turned upside down. Here are some general financial tips and if you have ever thought there may be a time to rent to own your home furnishings then bankruptcy is the time to take the RTO option seriously.
1. Don’t believe that you can remove bankruptcy from your record.
Unscrupulous credit repair agencies often promise to get legitimate bankruptcies removed. Only time can get truly accurate information deleted usually within 7 years. It is also a federal crime to lie about bankruptcy.
2. Those who loan money forgive and forget easily.
Maintain and prove a financial responsibility over time, usually two years, and you will be able to be once again considered for credit and loans. The problem though is you will be charged a much higher interest rate. Keep making recorded and on-time payments through the years and your credit score will be back in good order.
3. Consider rent to own home furnishings for a number of reasons.
If you’re starting a new home life with little or no furniture. Or you still need a refrigerator but cannot afford it and now have no credit. Take a serious look at the rent to own option for your home furnishings. With rent to own, you are not extended credit nor do you go into debt so harming credit is not an issue. You also do not have to have credit to rent to own.
Rent to own payments are used by many credit agencies to help reestablish credit. Make sure you pay on time and end up owning the product. Use as few rent to own payments to own the product so you pay far less than longer rent to own payment plans.
Rent to own payment plans are only issued at the request of the customer and if the rent to own company agrees. Because rent to own is specifically geared to not hurt credit scores or put consumers in debt, they are not tied to credit reporting agencies. But almost all rent to own companies are more than happy to release a payment history to help their customers.
It’s important to keep payments manageable to ensure that you make timely payments and reconstruct a good payment history and credit rating. Rent to own gives you the flexibility to choose a payment plan that works best. And, better yet, you can change that payment plan at any time when necessary.
Rent to own used furniture, home electronics and appliances can be the best used deals in town. They are cash deals thus no credit, debt and in many cases still in great shape.
3. Faithfully write down how much money you spend.
Watching your spending habits on a sheet of paper is a much different learning experience than ‘throw and go’ your money. If you can, try to get a debit card as that will log the information for you and if you need proof of payment history to help establish future credit then you have one.
4. Establish an emergency fund.
Easier said than done but anything that you can stow away will add up. And, will ingrain in you the fundamental financial rule of saving for you and your family’s future.
5. Don’t close existing credit accounts.
Closing accounts hurts your future credit scores as it shortens your credit history which credit reporting agencies place importance. And by eliminating available credit, it appears that you are much closer to maxing out your credit even if you have not spent another penny. Unless you absolutely cannot resist the temptation to spend, you’re better off hiding the cards and leaving the accounts open.
6. Be patient.
Every bankruptcy is different thus every strategy to rebuilding credit will be different. Building good credit takes time, and even more so after a bankruptcy. But it is doable.
Just another ShopRTO home finance tip.