Secured Credit Cards After Bankruptcy
Posted by Jennifer
If you’ve started looking at your life after bankruptcy you’ve probably noticed a ton of people saying you should get secured credit cards, but why? And how? It’s actually really important that you understand how all of this works if you’re going to make it work for you.
In your new life you are free of your old debts and this should be a new start for you. The big downside however being your credit report. That big black mark on it is making it difficult for you to do much of anything. When you have a bad rating it can really put a hold on your whole life, and that’s no way to live. But that mark won’t come off of your report for ten years, so there’s nothing to do about it, right? While it’s true that it won’t be coming off anytime soon, you can still have an improved rating in as little as two to three years with a lot of hard work and planning. The older your discharge is, and the more positive history you’ve built up on top of it, the less heavily that is going to weigh down your rating.
So how do secured credit cards after bankruptcy come into play? They help you build up a positive payment history on a new account. In order to improve your score you’re going to need to build up a lot of positive payment history, and this is just one big step in that direction, and something you can do easily even with your history. What are these accounts, exactly? Well, first of all, security means collateral. In the beginning of your new life it’s going to be difficult to get any companies to work with you. It’s a lot easier to get approval on new accounts if you have some kind of collateral, however. So, while getting the unsecured cards of your past would be very difficult if not impossible, this is a way for you to get back into the game.
Now, how exactly do you get a secured credit card after bankruptcy? Well, you can get these types of cards from your bank. You’ll need at least a few hundred dollars to put into a savings account, which will work as the collateral and also set your limit on the card. Then you use the card like you would an unsecured one, which, for good credit building practices, would be using under thirty percent of the limit and paying off your balance at the end of every month. When you sign up for the card, make sure that they report to the three major bureau or you’re not doing yourself any good. Also, the card should have the option of switching to an unsecured account after twelve to eighteen months assuming that you have made all your payments on time and are in good standing.
The accounts themselves are very straightforward and the reason for getting a secured credit after bankruptcy is pretty straight forward as well. It’s just about moving on with your life, rebuilding, and not letting any of your past issues rule your present.
Tags: after bankruptcy, after bankruptcy goals, credit after bankruptcy, life after bankruptcy