Thread: Rebuilding Credit After Debt Settlement

With my pending debt settlement, how soon after can I begin rebuilding credit? I am still not clear yet on the path my debt settlement will go down with, if it will be with the creditor directly or a second party, though I would like to begin rebuilding credit as soon as possible. Would it be better to wait until the debt settlement is over to start taking out credit cards or would that be something I should be doing right now. Would store cards be easy the easiest unsecured that I should start with?

No. Why do you ask if I am kidding?

I think because you're trying to get out of debt and are still in debt and already thinking about what credit cards to get.

Originally Posted by jeffysdad

You have got to be kidding.

Something tells me Judy is not kidding. She is a stereotypical example of the American in 2011. The days of fiscal responsibility are over and today the name of the game is boom bust. Spend all you can on credit during the boom times, walk away from your debt during the bust, repeat. Welcome to the new America. Why else would Judy want to start rebuilding credit after debt settlement? What is it Judy needs the credit for? Would it be that unthinkable for Judy to spend a few years saving up for her purchases instead of financing using credit cards and cheap loans?

How soon after the debt settlement process is complete can you begin building credit. Should you start right away?

Not an unreasonable or foolish question at all. Someone got in over their heads, and it can happen for many reasons, medical issues lead the list, other unplanned issues such as job loss, family crisis are up there too. It could be out of control overspending, but then again perhaps not.
Credit is essential in todays society. Good credit management is also essential. Assuming that the issue is not an out of control open wallet then rebuilding credit as quickly as someone can, and doing it responsibly with products like a secured credit card makes sene to attempt immediately. Credit history matters so the sooner that someone gets beyond a debt settlement, short sale or other adverse event on the bureau, the better off they will be in getting lower insurance rates, apartments to rent and other services where credit may not even be used but is checked.

Starting to rebuild your credit should start ASAP after debt settlement. I don't know the specifics of your situation so its hard to give specifics. Starting to rebuild does not only mean taking out new lines of credit. Initially what you may be approved for will be terrible offers that cost more money than they are worth. If you really are ready for new lines of credit start by saving for a secured card. Its important to get a secured card that has a high enough limit so that you do not go above that magic 20% or 30% that seems to be the limit.

Its sad that if you miss years of payments for whatever reason that you are better off just ignoring creditors(not courts) and waiting for debts to be removed off of your credit. It takes 7 years to have debts removed from your report and a single payment restarts that clock. Thats a mistake I made 6 years ago.

If you cannot save for a secured card then you probably are not ready for credit yet.