Almost anyone can get credit cards after a bankruptcy. It's just a matter of knowing how. Long before the bankruptcy drops off your credit report, you could be qualifying for loans with good rates and terms.
Get a secured credit card. After bankruptcy, getting approved for an unsecured credit card is tough. On the other hand, you can get approved for a secured credit card. Simply put down a down payment with a bank or credit card company and receive a credit card.
Persons who submit a $500 down payment receive a $500 limit. Once you make regular payments for two years, the credit card switches to an unsecured account, and you get your deposit back.
Check your credit report. Reporting errors can slow your recovery efforts. Order a copy of your credit report at least once a year to check for mistakes or unknown accounts. Loans after bankruptcy With consumers more frequently stuck with their debt, it might seem that issuers would be less likely to offer them credit. But this is not the case.
The frequency of this situation was highlighted in a recent study by Katherine Porter, an associate professor of law at the University of Iowa. In a paper titled "Bankrupt Profits: The Credit Industry's Business Model for Post bankruptcy Lending," professor Porter found that 96 percent of consumers polled were offered new credit in their first year after declaring bankruptcy.
Porter's study looked at individuals who filed for bankruptcy in 2001, before the change in bankruptcy law. If anything the new bankruptcy law will worsen the phenomenon because it lengthens the period between when consumers can receive a bankruptcy discharge from six years to eight years.
Open a CD To get credit cards after bankruptcy it is recommended to use a certificate of deposit as a way to rebuild their credit while earning some money. She recommends that consumers take out a small personal loan, which they use to open a CD.
Consumers should choose a reasonable length of time to lock up money in the CD, such as a year, and make all loan payments on time or ahead of time. Shore suggests guaranteeing on-time payments by setting up an automatic payment system.
By the time your CD has matured, she says, the borrower will have not only have shown a good credit history over the length of the certificate, they will also have earned some money. This allows consumers to re-establish their credit without the temptation of a credit card.
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