Credit Law Firm
When you file for bankruptcy, you are ultimately giving your financials a “clean sweep” by clearing any remaining debt. In that aspect, bankruptcy can seem therapeutic from a financial standpoint. However, filing for bankruptcy also brings along its own consequences.
Once you’ve gone through the bankruptcy process, you’ll likely want to start applying for credit cards to rebuild your credit. Filing for bankruptcy is a sure way to tank your credit score since you likely have not been able to pay creditors what they were owed. This is a dark mark on your credit score that could take several years to clear.
Unfortunately, this makes it very difficult to obtain a new credit card. Additionally, credit card companies are very hesitant to approve a card application from someone who has bankruptcy in their financial history.
Getting a Credit Card After Bankruptcy
Attempting to obtain a credit card after going through the bankruptcy process can feel like you’ve stepped back to square one in your financial history. You should start the process by checking your current credit score regularly and understanding how it will affect your card prospects. The outlook might look dreary at the moment, but good credit can starting building up within a year—provided you pay all bills in a timely manner.
When deciding which card to choose, you will likely want to land on a secured credit card. At the surface, this card works like any other credit card—allowing you to purchase using a line of credit. However, when you first receive the card you must “secure” your credit line by submitting an upfront deposit. This provides the card issuer collateral if you fail to pay off your card. These cards are a great way for people to start the process of building or rebuilding their credit scores.
Rebuilding Your Credit After Bankruptcy
After going through the bankruptcy process, you’ll likely be hesitant to use your new credit card when spending money. However, using the card for small purchases that you can pay back immediately is the best way to start raising your credit score. Since your payment history is the strongest factor for your credit score, you should strive to pay every bill on time.
Once you’ve started building credit on your secured credit card, you will be able to apply for an unsecured credit card. Even once this happens, you should still routinely monitor your credit history and score. By understanding the process of applying and receiving a new credit card after filing for bankruptcy, you can fast track the process of getting your finances back on their feet.
If you have any questions about how to get a credit card or rebuild credit after a bankruptcy, call a bankruptcy lawyer, like a credit law firm in Las Vegas, NV, today.