Getting Credit After Your Bankruptcy

Many people would have you believe that if you file for bankruptcy protection, you will never be able to get credit again. You may have heard that it will be ten years before you can hope to find someone who would be willing to lend to you. While a bankruptcy will stay on your credit file for ten years, you can begin to work to reestablish your credit as soon as you receive your bankruptcy discharge.

The fact is that getting a credit card after a bankruptcy is actually quite easy. The type of card you will want to start with is called a secured credit card. These cards are often called guaranteed cards, because getting approved is based on the deposit you place with the lender and not your credit score. You will need to place a deposit with the lender, and they will issue you a credit line in that amount. Because they are completely secured, most lenders will issue you a credit line in any amount you wish to deposit. Failure to make your payments will result in them keeping your deposit.

When you begin to shop for the right secured card, there are several things that you need to consider. First, you need to make sure that the card that you choose reports to all three of the major credit bureaus. While most cards do since the only reason you are getting the card is to repair your credit, it is important to make sure that the card you choose reports. Avoid paying application fees up front and look for a card with fees that are not too high. This is not as big of a problem as it once was, thanks to the new credit card legislation. Shop around and find the card that offers you the best deal.

If you can, finding a credit line with a conversion feature is a great idea. This means that after a set amount of time, typically between twelve and eighteen months, the account will become unsecured and your deposit will be refunded or applied to your balance. This will give your credit score a boost, because unsecured credit cards do more for your credit than secured credit lines.

After you have made six to twelve on time payments, it is time to start looking for unsecured credit lines designed specifically for individuals with bad credit. There are many companies out there that have credit cards that are targeted to those with trouble credit histories.

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