Mo' Better Credit

After I did an article on establishing credit, a number of people have called or written to ask about strategies for re-establishing credit after declaring bankruptcy. I wish I had some special tips for you guys, but there really isn't anything different or extra that you can do. You have to go through the same general process that I covered in the article and just wait it out until someone is willing to give you a credit line again.In other words: Keep your credit record as clean as possible by paying your current debts promptly. Get a copy of your credit report and dispute any inaccuracies you find. Ask the credit bureaus to add a statement to your file that shows evidence of your stability and any positive credit histories not reflected in the file.Secured credit cards are one of the most likely options for those who have credit problems; see the sidebar to the above- mentioned credit article, which lists local banks offering secured cards or write to Consumer Action (116 New Montgomery, Suite 233, San Francisco, CA 94105) to request that organization's survey of secured cards. Do not apply for secured credit with any company that requires you to pay an application or processing fee.Secured cards aren't the only possibility, though. "In general, credit unions are really good about helping people re-establish credit, especially if you have your paycheck deposited directly to your account," says Candace Acevedo, director of education for the nonprofit Consumer Credit Counselors. For a really solid, thorough guide to handling money and credit problems, check out Nolo Press's Money Troubles: Legal Strategies to Cope with Your Debts, by Robin Leonard (1995 18.95), available at many libraries.As to how long it takes to reestablish credit after a bankruptcy, it's the luck of the draw. Acevedo says she's heard of people receiving offers almost immediately after filing -- some card issuers apparently see bankruptcies as a marketing niche, relying on the fact that you can't file again until six years have elapsed. Of course, such offers are generally tied to an outrageously high interest rate, so beware -- you don't want to end up in the same credit quagmire all over again.For those of you who have a good credit record, remember that you can use it as a bargaining chip to have your interest rates reduced and/or annual fees removed from existing credit card accounts. If you have good, established credit, there's absolutely no reason to be paying an annual fee, although you'll have to ask for it to be waived every year. I've had the fee waived on two credit cards for a good five years now and recently negotiated a substantially reduced interest rate on one of them as well. And I didn't even have to threaten to leave: when I called up and said I wanted to renegotiate, they eagerly offered a lower rate than I would have asked for.And one final tidbit from my credit files: there's another one of those mailings making the rounds -- you know the kind, with the official-looking envelope and "Check Enclosed" stamped on the front. This one's from something called the "Preferred Cardholder Division" and contains a check for $4. If you deposit this check you will be signing up as a "Preferred Member of the Credit Card Protection Agency"; you're asked to provide a credit card number on the back of the check, along with your endorsement. The cost is "only 83 cents per month." For seven years.That comes to $69.72, and what do you get? Well, the main item is "protection against fraudulent charges" after you call to report a lost or stolen credit card. Terrific, except that you already have exactly that protection under the law, and you don't have to pay a dime for it. If you want to, you can cash the $4 check and then cancel the service, but I wouldn't give these guys my credit card number.

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