Credit After Bankruptcy – Obtaining Credit Cards After Bankruptcy

Obtaining credit cards after bankruptcy is not as difficult as most people believe. While bankruptcy does practically destroy your credit rating, this change to that mysterious three digit number used by lenders does not last for ever.And while bankruptcy appears in your credit report for (up to) ten years, even before it is dropped from the report, you may still qualify for loans and credit cards without predatory rates and terms.Adopting good credit practices, such as timely payment and using only a small portion of your credit card limit, can help reduce the impact of bankruptcy and repair you credit.One of the most important things you can do when obtaining credit cards after bankruptcy is to acquire a credit report. All too often, some old debts and unpaid loans are still present as delinquent accounts on credit reports after bankruptcy. If this is the case for you, contact the credit agencies immediately to correct the error. Be prepared with your personal information, so they can verify the bankruptcy and remove those negative entries.When you apply for credit cards after bankruptcy, be careful and selective. Avoid so-called “predatory” or “maximum rate” lenders who may offer extensive and attractive credit, but can charge interest over twenty percent.Avoid filing too many credit applications at once, which can further damage your already lowered and delicate credit rating. Large numbers of credit applications and open credit accounts for a bankrupt person can send red flags to lenders about the creditworthiness of the applicant.It may be a wise choice to start with a “secured” credit card, where the credit limit is backed by money deposited in a bank account. This allows you to build up a positive credit history, while providing reassurance to the lender that the debt will be repaid.After receiving your post-bankruptcy credit cards, develop some good habits. Avoid using your full limit. Try to make modest purchases with the card on a regular basis. Pay your credit card bill on time. When making payments, try to almost in full but leave a small balance (about 20% of limit) in order to keep it reported. All of these things can drastically improve your creditworthiness.Obtaining credit cards after bankruptcy is possible and can be an excellent tool for rebuilding your financial reputation. With a little bit of caution and good credit habits, you can see your credit rating in great shape and your bankruptcy removed from your credit reports within a few years.

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