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Charging Forward Post-Bankruptcy

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After a recent bankruptcy you may be feeling the need to build your credit “credibility.” While it’s always important to understand the perils of plastic—the reason many average Americans choose bankruptcy in the first place—it’s also important for a better financial future to show creditors that you can successfully manage that type of debt.

Even qualifying for an initial credit limit of $1000 is a good place to start for a newly-discharged debtor, assuming a few conditions are met, including:

(1) You are Pre-Approved for a Credit Card
Qualifying for the a credit card is a little like going to the prom…it always feels better the more you are asked. Similarly, it’s better to be pre-approved for plastic rather than having to apply yourself. This is a must for even the most credit-needy consumer as the less you have to apply, the more likely it is that you could be rejected. A card rejection means you will have an inquiry on your credit report showing you applied for credit but were denied, a fact that can negatively impact your credit score just as you’re trying to repair it.

(2) You Receive the Credit Offer From a Larger Bank
When it comes to rebuilding credit, the bigger the lender the better. The larger the lender (think “national bank” or even a local credit union) versus a smaller finance company, the more favorably creditors will look at these more trusted types of credit lines.

(3) There are no Annual Fees or Other Activation Costs
Are there any annual fees or activation costs associated with the card? If so, keep shopping. These fees can quickly add up and do nothing to help you build a better credit rating.

(4) The Credit Line Will be Reported to all Three Credit Bureaus
If the credit line you’re offered won’t be reported to all three major credit bureaus, then it’s best to move on. You’ll need to establish credit with all of the majors (Experian, Equifax and TransUnion) in order to get the most credit bang for your plastic bucks. Make sure to validate this comprehensive reporting with the card provider BEFORE signing on the dotted line.

(5) Your Credit Limit can be Increased in Six Months
You can start with a $1000 limit…but how quickly will your credit be increased? The right card company, with the right offer, will allow you a credit limit increase every six months; assuming that is you are using the card each month and paying the balance in full before the end of the billing cycle. Using credit, interest free, like this is the quickest way to make your credit soar without the impact of using plastic.

(6) Your Interest Rate is Low or Negotiable
A low interest rate (or at least a rate that’s negotiable given a good payment-to-usage history), is important if you’re expecting to keep any balance on your new credit card. Make sure even if you do qualify for a higher rate you feel confident requesting a lower rate in the near future.

And remember, if you’re drowning in credit card debt or other consumer debt issues, knowing a qualified bankruptcy attorney can help you face many of your financial fears, yielding the right kinds of support, information and insights—at a low cost—to help you charge ahead in the near future. The bankruptcy professionas at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to 1-888-234-4181, or make an appointment online at www.billsbills.com.

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