Although some Long Island residents may understand that filing for bankruptcy can negatively affect their credit score, what they may not know is that it is possible for their credit to bounce back after the bankruptcy process is complete.
When a creditor is determining whether an individual is eligible for a credit card after bankruptcy, they will examine a number of factors. For example, one factor they may examine is the individual’s income. Also, the amount of time that has passed since the bankruptcy process was completed may also be a factor. However, if an individual applies for a credit card after bankruptcy and is denied, the credit card issuer may not fully explain why.
That being said, one option to consider is filing for a secured card. The goal of these types of cards is for applicants to rebuild their credit. With secured cards, the individual puts down a certain amount of money as a security deposit, which usually matches that individual’s line of credit. This security deposit is put into place so that the issuer is protected if the individual doesn’t pay the required amounts. Thus, secured cards can be a secure way for a lender to give an individual a line of credit, even if that individual’s credit score isn’t very high. Sometimes individuals will go through a bank to obtain a secured card, but they may also choose to do so through a credit union.
Secured cards may be one way for individual who has gone through bankruptcy to start rebuilding their credit. By showing that they can responsibly handle credit, and by doing things such as earning an income and paying off other expenses, such as medical bills, it may be possible for individuals to increase their credit scores. While this post cannot guarantee any specific result with regards to an individual’s specific case, those who want to know how secured cards would help their financial situations may want to consult a professional.
Source: nerdwallet, “Applying for a Credit Card After Bankruptcy,” Kevin Cash, March 17, 2016
