How to Obtain Credit After Bankruptcy

There IS Life After Bankruptcy

Coming to the decision of whether or not to file for bankruptcy is tough. The fear of not being able to have a healthy credit life after bankruptcy lies within. Can you ever get a credit card after bankruptcy? The answer is YES. I would like to share some tips and ideas on what helped us to rebuild our credit after bankruptcy.

Instructions

1. 

   OK, so you have finally decided that bankruptcy was the best option for you. Now what? If your credit was so bad or debt so uncontrollable before bankruptcy, things can only get better from here on out. This is a fresh start for you. This is going to take alot of discipline on your part. Hopefully you know and are able to pinpoint what got you in the trouble that led you to bankruptcy in the first place. First goal: DO NOT REPEAT!

2. 

   First thing that you must do is obtain current credit reports from all three major credit bureaus: Experian, Equifax, and Transunion. You MUST do this before applying for any new credit. Look below in resources on places where you can obtain your credit reports for free. Once you have all three credit reports, carefully go through it and make sure it is all accurate. Be sure that all the accounts that were included in your bankruptcy are carefully notated as so. If some aren't, you may need to dispute it or fax your discharge papers to the credit company. Follow through until it is updated. This will take some time and diligence. You will need to do this with each credit report.

3. 

   Before you go off applying for new credit, STOP! There is plenty of time for that. I always suggest to try to go a year without applying for new credit. Why? Because for one, this is going to allow you to save money in your savings account. This will give you some security and get you in the pattern of saving on a consistent basis. Pay yourself interest rather than a credit card company. This will also "wean" you from being credit dependent. Secondly, waiting at least one year to apply for new credit you give you better options to choose from.

4. 

   Technically, you can start applying for credit the day after discharge. But guess what? You are going to get the worse offers, most likely. You may get stuck with annual fees as high as $150, monthly maintanance fees, APRs as high as 24% and so on. So this can cost you alot more in the long run and get you in that dangerous debt situation again. Credit card companies send you their worse offers first. They want to see if you are desperate enough to settle for that. If you wait, the offers will get better and better. Trust me. I waited and I started getting offer with 6 months, 0% APR, no annual fees, no monthly fees, and lower APR's. Patience is a virtue, and in this case, if you are patient it will really pay off.

5. 

   If waiting a year or so is not an option for you, then sure you can start rebuilding your credit. But you do want to make sure to have reviewed your credit reports to assure accuracy.
   Once you have signed up for a new credit account, stop there. Don't go credit card crazy. Get one card and baby it. Don't charge more on your credit than you can pay off at the end of the month. Use it for gas, groceries, or anything you like. Just be sure to pay it in full with your next statement. Do this consistently, and you will see your credit scores rise, sometimes as soon as 4-6 months.

6. 

   Control your charging habits. Save, Save, Save. Set up automatic savings if you can. Have $50-$100 from your paycheck going directly to your savings account and leave it alone. Be sure to make your credit card payment(s) on time EVERY month. If you want another line of credit, fine. Please don't over do it. Slow and steady wins this race. Also, remember, frequent inquiries on your credit report does reflect as negative and can also lower your score. Once you are consistently making payments on your credit, you will start to get better offers and your credit score will start to rise. My husband and I were able to raise our credit score over 200 POINTS within 2 years of doing this consistently. We have 3 credit lines each now with low APR's, no annual or monthly fees. Our credit score still goes up every few months. I was also recently approved for a vehicle loan from Capital One 8 months ago. I would have never been approved pre-bankruptcy. So be patient, have discipline, and most importantly , have faith. It will get better, you are now in control.

7. 

   If you don't know where to start, here are some credit card companies that extend credit with prior a bankruptcy..
   www.OrchardBank.com;
   www.FirstPremier.com
   www.AspireCard.com
   www.CapitalOne.com;

   These are just some suggestions, please be sure to read fine print and check the fees involved.

Tips & Warnings

• Credit Unions will usually extend credit with a bankruptcy also. Check one out if you can.

• Again, wait as long as you can before applying, the offers will get better the longer you wait.

• Stay away from PayDay loans

• DON'T BE LATE ON YOUR PAYMENTS!!!

• Charge Responsibly

Resources

• Free Trial: 3 in 1 Credit Report/Scores
• Great Bankruptcy Advice- HELPED ME TREMENDOUSLY!