HOW CAN I GET CREDIT AFTER BANKRUPTCY?
credit after bankruptcy is difficult; nevertheless, it is possible.
Immediately after declaring bankruptcy, one's credit life can be
disastrous, but one could take advantage of their situation and
start to build a new credit record during this difficult time. The
three most common ways to getting credit after bankruptcy is to
receive secured credit cards, high interest credit cards, or a small
loan. These rebuilding steps will require great effort by the
bankrupt; however, they will re-establish one's credit after he or
she has declared bankruptcy.
Secured Credit Cards
a secured credit card is one of the easiest ways to re-establish
credit after declaring for bankruptcy. A secured credit card is a
type of credit card where one must initially deposit money with the
creditor in order to receive a small credit line. This deposit is a
safety measure for the lender in case one defaults on their loan. In
other words, secured credit cards are "secured" by savings accounts
that are authorized with card companies. If the borrower maintains
his or her payments for several months after the deposit, he or she
will most likely have their deposit refunded. One should strive to
receive a secured credit card from a lender who reports his or her
payment history to the credit bureaus. By reporting your secured
credit card payment to Experian, Equifax, or TransUnion, one is able
to publicly re-establish their new credit history and start on the
path towards financial freedom.
High Interest Credit Cards
Possessing a high-interest credit card is another way to
re-establish your credit after declaring for bankruptcy. These types
of credit cards typically have interest rates of 20% to 30%,
accompanied by large initiation fees and high annual fees.
Remarkably, the fees can often match the credit card's limit;
however, they do re-establish one's credit with the bureaus, if
reported. Although the fees seem steep, after several on time
payments, one's credit line will increase as well as their credit
score. Nevertheless, high interest credit cards do posses many
deterrents but if treated properly they could start to relieve one's
Acquiring a small loan is another
way to start to relieve one's credit after declaring bankruptcy.
Although this the most difficult way to repair one's credit after
bankruptcy, it is possible; however, it is solely based on you
relationship with your financial institution. If you know your loan
officer well, and he or she trusts you, they might be open to
creating a small loan for less than $10,000 in order to help you get
your credit record back on track. Often times, these new loans come
with high interest rates and small credit lines, but they are
another way to rebuild your credit after bankruptcy.
In order to
start getting credit after bankruptcy, one must seek ways to receive
loans which are reported to the credit bureaus. These documented
loans are the quickest way for one to start getting credit after
bankruptcy. Even though one has declared bankruptcy, their financial
future is not permanently damaged. If one receives any of these
types of loans, he or she will start getting credit after bankruptcy
and start on the path towards financial freedom.