Posted on: 20 January 2016
If you have gone through a bankruptcy, your FICO credit score has taken a hit. Without a good credit score you cannot do things like get a loan on a house, get a car loan, or even open up a credit card with a good interest rate. You need to be careful in what you do in the future, as there are things that can lower your FICO credit score.
Use a Credit Card to Rent a Car
It may not seem like a big deal, but if you need to rent a car, do not use your debit card. If you read the fine print in the agreement, you will see that they have a clause stating they can pull your credit report if you use a debit card. This results in an open inquiry, which may lower your credit score by a few points. Car rental companies check credit reports to give them protection for loaning you a vehicle.
Before you sign an agreement at a car rental company, ask them if they are going to make an inquiry on your credit. If so, use your credit card or simply pay cash.
Apply for New Credit
After your bankruptcy is over, you may be considering applying for a new credit card or other type of credit. Each time you apply for credit, the creditor will make an inquiry on your credit report. Having too many of these inquiries will cause your credit score to drop. If you apply to only one account, it will only cause your credit score to drop a few points. If you apply for multiple accounts all at once, however, you may see a significant drop.
Instead of doing this, comparison shop different credit cards or loans. Look at the features they offer, as well as one that has the best interest rate. Once you find what you want, apply for only that credit account.
You have the right to get one free credit report once a year from the three national credit reporting agencies: Equifax, TransUnion, and Experian. These reports will show your credit history and the accounts that are currently listed on your credit report. If you want to see that actual FICO score, you will have to pay a fee. This is generally a small fee. You can choose to get all three reports at once. If you want to keep an eye on your credit, however, scatter the three reports throughout the year instead of all at the same time. If you have any questions about this, your bankruptcy attorney will be able to help you.
To learn more about bankruptcy, contact a law firm like Morrison & Murff.Share