Getting Credit After Bankruptcy

Consumers do not have to live sans credit following a bankruptcy. By
following certain steps consumers can begin rebuilding their credit post
bankruptcy.

After filing for bankruptcy, many people are concerned about rebuilding
their credit. While it might be difficult to begin rebuilding your credit
after a bankruptcy, it is not entirely impossible. You will notice early on
that you will have to pay higher interest rates. This is because creditors
deem you as a risk because of your bankruptcy filing. Once you begin
rebuilding your credit, showing creditors that you are a responsible
spender, you will notice that your interest rates begin to decline.

You will want to rush to rebuild your credit after filing bankruptcy.
However, it is better if you take your time. If you have filed Chapter 13,
you should first focus on making your monthly payments. It is best to wait
at least eighteen months before you start applying for new credit. However,
if by that time you have not eliminated your other debt; you should wait
more time until you do not have any other debts to worry about.

The best way to begin rebuilding your credit after bankruptcy is to obtain a
secured credit card. (Selected cards can be found here:
http://www.credit-card-after-bankruptcy.com/) You should do this only after
you have been discharged for all of your debts. With a secured credit card,
you make a deposit into a savings account that is used as a security for
your credit card. Your credit limit will range from fifty to one hundred
percent of your deposit. Some banks pay interest on your deposit and allow
you to choose between a savings account, money market account, or a
certificate of deposit.

When you apply for a secured credit card, you should be prepared to pay fees
for the credit card. These secured credit cards often come with additional
fees that must be paid.
Application and processing fees are required upfront. Most secured credit
cards also require you to pay an annual fee.
Compare the total amount of fees that you must pay when you are shopping
around for a secured credit card.

After you maintain a positive credit history with your secured credit card
for about one or two years, you will likely be eligible for an unsecured
credit card. In the meantime, creditors will often increase your credit
limit when you regularly make your payments on time.

Trying to finance a car or a home after filing bankruptcy will depend on the
lender. Some lenders work with consumers who have recently filed bankruptcy
while others will not. Be aware that a recent bankruptcy filing will have an
effect on your interest rate, even if you have a favorable credit rating.

Good credit after a bankruptcy filing is attainable. Make sure that you
remain responsible with your spending and with time you will find that you
are able to obtain more and more credit.

About The Author: Fruzsina Csery is a freelance copy writer.
She occasionally writes for
http://www.credit-card-after-bankruptcy.com/