Getting Credit After Bankruptcy How You Can Improve Your Credit Score Here ph
Many people who seek bankruptcy protection often worry about their chances of getting credit in the future. While it isn’t uncommon for people to see a boost in their credit standing after receiving a debt discharge, not all lenders are willing to provide credit cards to people right after a bankruptcy. On the other hand, there are several credit card companies that actually target post-bankruptcy consumers as their main audience. However, just because a lender is willing to provide credit doesn’t mean that any card is sufficient. After a bankruptcy it becomes more important than ever to ensure your next line of credit is a good one. Common Mistakes One of the biggest mistakes people make after exiting bankruptcy is failing to review their credit report. In some cases, a credit report may contain inaccuracies and not reflect the current account standings. An inaccurate credit report is a large culprit in preventing you from obtaining a decent line of credit after bankruptcy. Another mistake is failing to shop around for different credit options. Some of the credit card companies that target post-bankruptcy consumers offer cards with high interest rates or unfavorable terms and conditions. Many people are tempted to jump at the first credit offer that comes along. Like any other time in your life, shopping around for different credit offers can do a world of good. Finding The Best One When looking for the right credit card after a bankruptcy it is important to remember two things (1) you should not be looking for credit to supplement your income and (2) the type of card you get is crucial. First, the point of securing a credit card after exiting bankruptcy is to begin to repair and improve your credit. You won’t be able to do that if you are using credit cards to pay for things you cannot afford. This is a slippery slope that can quickly land you back into debt. Second, not all cards are created equal. For example, prepaid cards may help keep you from overspending but they do absolutely nothing for your credit standing. Because you are essentially setting aside money ahead of time to be used for purchases, you are not able to accumulate any positive credit history on a prepaid card. Also, when looking at unsecured credit cards be sure to obtain the one with the best terms and conditions. This means that you should look for a card with the lowest interest rates and fewest penalties for late payment. Many people fall into the trap of securing cards with higher debt balances at the cost of higher interest rates. The most important thing is to keep a small, manageable balance with the most favorable terms. You should also avoid any secured lines of credit for at least 6 months to a year after bankruptcy as they carry high costs and penalties for defaulting.
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Do's and Dont's of the Credit Card Game Here pf Futhermore: Getting Credit After Bankruptcy
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