How Can You Get the Best Credit Cards After a Bankruptcy?
Getting the best credit cards following bankruptcy is not an easy task. Bankruptcy causes a tremendous amount of damage to a credit score, and many creditors are hesitant to loan to someone fresh out of bankruptcy. You must prove you can handle your finances before you will qualify for any credit cards, much less some of the best credit cards.
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Bankruptcy
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Bankruptcy is a legal process that can help get you out of overwhelming debt, but the bankruptcy itself creates a devastating effect on your credit score. Recovering from the bankruptcy will not happen overnight, and it will take time to rebuild your credit. It is impossible to come out of bankruptcy and immediately get one of the best credit cards (high-limit, low-interest), but with time and a concerted effort, you will be able to get a credit card that offers good terms.
Building Credit
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You will not improve your credit score unless you get new credit and handle it properly. Handling the debt properly requires that you make all payments on time, keep balances under 30 percent of your credit limit and make sure the creditor reports to all three major credit bureaus. Taking these steps will improve your credit score and help prepare you to qualify for one of the best credit cards.
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Secured Credit Cards
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Right out of bankruptcy, one of your options is a secured credit card. A secured credit card is not ideal, and it is not considered a good type of credit to have, but you have to start somewhere. It is important to make sure your secured credit card reports to all three credit bureaus. Many credit unions and banks offer secured credit cards. As the creditor reports monthly to the credit bureaus, your credit score will go up.
Best Credit Cards
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Every person will have a different opinion of what equals the best credit card, and you must evaluate this for yourself. Some people like a credit card that offers points toward rewards such as travel. Other people prefer a card with the lowest interest rate, and this is what they determine to be the "best" credit card. Evaluating what is important in a credit card will help you locate the best card for you.
Applying
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You must be prepared to wait to apply for the card of your choice until you can qualify. Watch your credit reports, and see how your credit score improves. Within two years following bankruptcy, it is possible to have a credit score in the 700s that will qualify you for most credit cards. Failure to work on building credit and repaying your debt properly will cause your credit score to rise more slowly. Once you have built up your credit score, contact the credit card issuer that has the credit card you want, and complete the application process.
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References
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