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How Do I Apply for a New Card After Bankruptcy?

Published on December 16th, 2019

Chapter 7 Bankruptcy Lawyer

In the middle of a bankruptcy, it’s easy to forget that there is financial life on the other side of it. One day you will be ready to rebuild your credit, and you don’t even have to wait until the bankruptcy falls off your credit report to do it. Getting a new credit card is an excellent first step, but remember that credit cards often lead consumers to overspend, contributing to bankruptcies, so as you move forward, proceed cautiously and spend responsibly.

Do These Things Before You Apply for a New Card After Bankruptcy

Here are two tips that can help smooth the way before you apply for a new credit card after your bankruptcy.

  • Get your credit reports from the three major credit bureaus, Experian, Equifax, and TransUnion. You get to request one free report online each year. If you filed Chapter 7, your report should be up to date within 90 days after the filing date. If you filed Chapter 13, the report should update within 90 days after the discharge. All accounts included in the bankruptcy should show “included in bankruptcy” with no balances. You should not see past due amounts or payments marked late after the filing date of your bankruptcy. If you see errors, dispute them with the credit reporting entity.
  • Raise your credit score as much as possible before you apply for a new card. One way to do this is to ask a family member with good credit to add you as an authorized user to one of their cards. You don’t need to have a physical card in your position; you’re just looking to gain a few points on your score by association with a well-managed card. Another possibility is to apply for a credit builder loan. With this type of borrowing, you borrow money from yourself and pay it back over time.

Start by Applying for a Secured Card

You probably won’t be immediately eligible for a traditional credit card. Instead, try applying for a secured card, which requires a deposit. The amount you put up is your credit limit. For example, if you put down a deposit of $1,000, you can spend up to $1,000 on the card. While secured cards usually have higher interest rates and fees than traditional cards, they’re just a temporary tool to help you rebuild your credit. Make sure that the card issuer reports to the credit bureaus.

Remember, as you start your search for a new card that every application is a mark against your credit score, so choose wisely. A knowledgeable bankruptcy attorney, like a bankruptcy law firm in Memphis, TN, can advise you of the resources to help you get started.

 


 

Thank you to the Law Firm of Darrell Castle & Associates PLLC, for their insight into bankruptcy law.

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