For many, filing bankruptcy seems like the end of every having access to credit. In reality, there are many easy ways to rebuild a good credit history. While some of these options may not seem obvious, they are used by people everyday to show that they deserve the rights and responsiblities that come with learning from a past mistake, and moving forward for the future.
After a bankruptcy, the idea of ever having credit again may seem like an
impossible idea. It may seem as though the days of being able to easily buy a
car, or get even the smallest loan are long gone. Even more, after a
bankruptcy, it becomes quite apparent that there are literally hundreds of
offers from various companies wanting to help you fix your credit.
The road to rebuilding and re-establishing credit is certainly not an easy
road to travel. In fact, the first few months after a bankruptcy are going to
be a very difficult time in the credit life of any individual. However, it is
during this time that you can take steps to begin to re-establish and build a
new credit record that can very quickly, in fact, more quickly that most people
realize, get you back on the road to credit bliss.
While the methods that often have to be used to re-establish credit are not
glamorous, and can even be somewhat humiliating for a person who just a few
month prior was accustomed to having access to limitless credit, these methods
are effective ways to get back onto the road of good credit.
Secured Credit Cards
One of the easiest ways to re-establish your credit is by applying for a
secured credit card. This type of credit card is just what it says: secured.
For the privilege of having a $500 or $1000 credit card, you must deposit that
much money with the credit grantor.
When the bill comes due each month for your purchases, you still pay on the
credit card as though you had never made the deposit. The original deposit is
simply security for the lender in case you default on the loan. Usually, the
deposit money is refunded, either in increments or in a lump sum after several
months of on-time payments.
The key to using a secured credit card to re-establish your credit is to
find a credit card company that reports your payment history to the three major
credit bureaus. You can usually find such a card through your local bank or
credit union.
By reporting to the three major bureaus, which are Equifax, TransUnion, and
Experian, you are giving yourself an open line of credit with a good payment
history. Every open line of credit with a good payment history begins to
outweigh the negatives. Slowly, but surely, your credit score—and your ability
to get credit—will increase.