This is the number one question I get asked whenever a client visits me. Most of them have been told, incorrectly, that they will never get credit again and they are worried about that. The truth is, you will be able to get credit cards, car loans, mortgages, etc. even if you filed for bankruptcy.
Low tech way: carry your oldest credit card in your wallet and be sure to use it once a month to buy either gas or groceries. This purchase will keep your card active and counting positively in your get credit report. Pay it off at the end of the month so you are not hit with any finance charges.
Let me tell you that there are also some other banks who may provide you poor credit or poor credit loans. They know that in some situations these kinds of loans are much-needed in this economy. But, to get these loans you have to do some research and should get it approved. If you are affected by multiple bad credit factors, you will get a loan from them.
Use that card. Use it a little, use it a lot, it doesn’t matter. What’s important is that you pay off the balance on time and every time! This is extremely important. If you don’t do this, then you’re better off never getting the card in the first place. With online bill pay features it may be tempting for some to pay off the card after every other transaction. Don’t do this. Let the balance sit until the end of the month, and then pay it. What you’re doing here is establishing a is credit karma safe score. If you never carry a balance, you won’t be able to establish a score. That’s why waiting until the end of the month to pay it off is important.
If you have a job and can show proof of income, then you can apply for a card in your name. If you are able to obtain a card, then you are the only person financially responsible. You must pay your bills and pay them on time. Ideally they should only be used for emergencies. If you make purchases just because you have the card, when you truly have an emergency you won’t have the funds available to take care of your situation. Live within your means!
Be aware of excessive credit enquiries. If we are not sure about our credit health, we should get it checked before applying for new credit. Declined credit applications on our credit report can hinder our chances of obtaining a loan. Some lenders are rejecting loans for as little as two enquiries in 30 days, or six enquiries within the year.
Filing Chapter 7 or 13 bankruptcies is not the end of your good credit, it only appears that way. You can pull through but you must be disciplined and patient. You didn’t get here in a couple year and you can’t fix it in a couple years either. If you pursue these steps you will be well on your way to better credit. It just takes effort on your behalf and some time to repair your credit after bankruptcy.