Building a Long-Term Plan for a Car or Home Purchase

Every once in a while life throws someone a curve ball, or they might make ill-informed decisions. Sometimes it is easy to get out of the kind of messes that these situations create - other times, it will take a lot of work.

Bankruptcy is one of life’s curveballs that is not easily dealt with. If you take a really good look at the world we live in today, you will see that it basically revolves around credit.

There is almost no one who pays cash straight out for their car or their home. Even everyday items such as television and shopping are increasingly charged on credit instead of being rung up free and clear.

As a result, more and more people are finding that bankruptcy is their only option.

In this article we are going to specifically talk about long-term strategies that will help you have a better chance at getting credit post-bankruptcy for the two most important big credit items: a car or a home.

Have a Strategy

The most important part of looking toward the future after a bankruptcy (we are assuming a discharge of the bankruptcy in this article, for advice on getting credit while in Chapter 13 take a look at some of our other articles) is being able to see things in terms of consequences and rewards in the long term.

What this means is that once your bankruptcy has been discharged, you will have to make a commitment to rebuilding your credit if you ever hope to get good terms on any loan, and easily qualify for a loan, in the future.

You need to start by analyzing what went wrong last time. How did you end up going bankrupt, and how can you prevent it the future. After that, there are a couple of easy steps to take.

• Make a budget . Know what you are going to spend, why, and when.
• Stick to it! Stick to that budget no matter what. Most of us get in financial trouble with our wants, not our needs, so make sure you are only spending where you need to.
• Never miss a payment . Never miss a payment on credit cards, your rent, your car loan when you get it, or anything else. Every payment is a mark in your favor when it is received on time, and will help you re-build your credit score.

In another article we will take a look at the specifics when it comes to receiving credit for a car or home loan after a bankruptcy, but for now the main point is this: rebuild your credit over the long term.

Once you are able to do this, your bankruptcy won’t haunt your future.