Submitted by Jen Jones on Sun, 05/29/2011 - 3:26pm
Whether you’re considering bankruptcy or just coming out of it, you may be wondering the best ways to rebuild credit as soon as possible. Obviously, credit cards are one way to rebuild your credit history (and future) more quickly; but most people entering or exiting the bankruptcy process are well aware of the perils of plastic…and how difficult it can be to qualify for a card with a dinged credit past.
Here are a few ways to select a good credit card despite a bad credit history:
(1) Make to a Call to the Potential Creditor
You may not get offers in the mail, so it’s a good idea to “make the first move.” Give banks that appeal to you a call at the 800 number listed on their website in order to address their practices, policies and intentions.
(2) Ask the Creditor’s Policy in Dealing with Bankrupt Customers
First and foremost, ask the credit card company if you, as a bankrupt debtor, can qualify for a credit card from their bank. In determining their response, the creditor may inquire as to how long it’s been since your bankruptcy. Regardless, get as many details (interest rates, fees, secured or unsecured, etc.) about their offers as possible so you can make an informed decision on whether their card is right for you.
(3) Determine the Issuing Bank
It’s important to find out the bank that’s issuing the credit card and verify the name with the FTC. Remember, if there’s no bank, it’s not a real credit card.
(4) Get the Grace Period
Ask the creditor directly what the grace period is for their credit card. Disqualify any credit card that has a grace period of less than 25 days.
(5) Credit Bureau Involvement
Find out if your credit card payments are reported to all three (if not four) major credit card bureaus. If, not, cross them off your final list. Without those reports you cannot improve on your credit history for a better financial future.
(6) Reported as Secured or Unsecured?
Get the creditor’s confirmation as to whether the credit card will be reported to credit bureaus as a secured (or unsecured) card. If it’s the former (secured), remove that particular piece of plastic from consideration. Sometimes, the card will be considered “secured” for a limited time, and then report as unsecured. If so, keep it on your list. The point is, secured cards, being secured by your money deposit already, hold less weight with credit card companies as they may not be signifiers of significant credit risk and a consistent payment history.
(7) Secured Credit Limit
If a secured credit card is your only option, you might want to ask if your credit limit is equal to your security deposit, more than your security deposit or less than your security deposit. In most cases, you should only choose a secured card where the credit limit is more or equal to the deposit. Again, this shows credit risk and therefore allows you to recoup credit health more quickly.
Understanding the pre-and post bankruptcy landscape can be difficult. Getting to know a qualified bankruptcy attorney can be the first best step to help any financially insecure person conquer their creditors, yielding the right kinds of support, information and insights—at a low cost. The bankruptcy attorneys 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 +1-919-646-2654, or during the off hours, you can make your own appointment right online at www
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