Post Bankruptcy Credit Card

People who are considering filing for bankruptcy often worry that they will never be able to get a credit card again.
Or, people worry that it will be years before they will qualify for credit. Neither of these fears is true. In fact, one of the best ways to rebuild your credit after declaring bankruptcy is to get and use a credit card.

After declaring bankruptcy, it is essential that you take steps to rebuild your credit score. Maintaining your good standing is an important first step. Making payments on mortgages and student or car loans on time will help maintain this good standing with creditors. An additional essential step is to open a post bankruptcy credit card account and to stay current on the payments.

Although declaring bankruptcy will not erase the record of your debts from your credit history, you can show through post bankruptcy use of a new credit card that you are capable of satisfying the terms set by new creditors. Paying the balance down on the card will help improve your credit score by reducing your credit utilization ratio. It is ideal to carry no balance on this new credit card; however, if that is not possible maintaining a balance between ten and twenty-five percent of the available credit line will help your overall credit history.

There are many offers available for credit cards for the newly bankrupt. The terms of the offers may be slightly different than before declaring. The available credit limits are likely to be lower while the interest rate will be higher on cards you qualify for immediately after declaring. However, studies have shown that in as little as one to two years after bankruptcy discharge, debtors may qualify for loans and credit cards on similar terms as if they had not filed bankruptcy. Additionally, carefully consider whether a secured or unsecured credit card may be better for your situation. Both types of cards can be used to rebuild your credit score. Inquire with the lender to ensure they report your positive credit use to credit agencies.

Regardless of when you consider opening a new post bankruptcy credit card account, it is essential that you review the terms and select a card with terms you can handle. Consider the relationship between the credit terms and your monthly income and the stability of your income. If credit trouble contributed to your bankruptcy declaration, be sure to learn from your previous mistakes and understand the terms of your new credit card before charging ahead.



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