What You Can Do to Avoid Problems with Credit After Bankruptcy

What You Can Do to Avoid Problems with Credit After Bankruptcy

* If you don’t want it, don’t get it.  If you have doubts about whether you really need the loan or service, or whether you can afford it, don’t let yourself get talked into it by a salesperson using high-pressure tactics.  You can always walk away from a bad deal, even at the last minute.

* Shop around.  You may qualify for a loan with normal rates from a reputable bank or credit union.  Don’t forget that high-cost lenders are counting on your belief that you cannot get credit on better terms elsewhere.  Do not let feelings of embarrassment about your past problems stop you from shopping around for the best credit terms.

* Compare credit terms.  Do not consider just the monthly payment.  Compare the interest rate by looking at the “annual percentage rate,” as this takes into account other fees and finance charges added on the loan.  Make sure you know exactly what fees are being charged for credit and why.

* Read before you sign.  If you have questions, get help from a qualified professional to review the paperwork.  A lender that will not let you get outside help should not be trusted.

* If you give a lender a mortgage in a refinancing deal, remember your cancellation rights.  In home mortgage refinancings, federal law gives you a right to cancel for three days after you sign the papers.  Exercise these rights if you feel you signed loan papers and got a bad deal.  Don’t let the lender talk you out of cancelling.

* Get help early.  If you begin to have financial problems, or you are thinking of consolidating unmanageable debts, get help first from a local non-profit housing or debt counseling agency.

Source: Using Credit Wisely After Bankruptcy Pamphlet, National Consumer Law Center, Boston, MA, www.nclc.org.