Business Marketing & Finance Resources

Ideas on how you can Rebuild your Credit after Bankruptcy:

Get a Secured Credit Card
For consumers who have recently gone through bankruptcy, a good choice would be to obtain a secured credit card. Secured cards required the applicant to open a bank account with a balance that matches the credit limit of the secured credit card. Typically, the limit will amount to $500 maximum, but be prudent about the usage and limit your charges to no more than approximately 30% of your credit limit. Focus on light, regular use of the card to help rebuild your credit. It is important that your credit card gets reported to the credit bureaus, but try to prevent having it reported as a secured card. Also, don’t just grab any secured card that is available. Take a close look at possible huge upfront charges and annual fees. In addition, ensure that your payment history is being reported to the three major credit bureaus: Equifax, Trans Union, and Experian.

Open a CD
Using a certificate of deposit (CD) as a method to rebuild credit is another option. A small personal loan is used to open a CD for a minimum of one year, and the loan payments that are made on-time will show good credit history during the length of the certificate. This strategy is helpful to re-establish credit without having the temptation of a credit card.

Installment Loans
Student loans (not typically dischargeable in bankruptcy), can be used to rebuild your score with timely payments and possibly paying more than you owe if possible will help even more. Other types of installment loans include auto loans (expect a very high interest rate initially), and a high-rate mortgage, sometimes available in a little as six months after your bankruptcy case is closed. Just make sure you can really afford a home before buying it.

Additional Ideas
• Pay every bill on time
• Check your credit reports regularly
• Save as much money as possible
• Minimize the number of inquiries on your credit report

The recession has spoiled the financial plans of many. Some have maxed their credit cards out, others have used all their life savings to attempt a new startup business or just to get away from their home country and the depressing times, even though it will cost nearly twice as much to do so.

All this will come back to haunt you no doubt, when you realize you are not in a position to repay your debts back on time. When you have a poor credit score, it becomes next to impossible to secure credit facilities. Absence of credit facilities only makes it even more difficult to improve your score. How should you break out of this vicious cycle?

The smartest option is to go in for a secured credit card. That is right. You just have to deposit money in your credit card account and use the same as you would use a debit card. Despite the characteristics being the same as any bank transaction, every transaction will be treated as a credit transaction and you will enjoy an improvement in your credit score every time you use a secured credit card.

Further, you can use the secured credit card to avoid debt traps that usually accompany excessive use of any credit card. You can stick with this approach until your credit score improves and you qualify for low interest rate credit card. Further, the habit of living within your means will help you avoid the temptation of using your credit card for impulsive expenses.

As time goes by, your credit card issuer will be prepared to offer a credit facility that is fixed as a percentage of the amount deposited. A 50% credit limit means that you will enjoy the ability to spend one and a half times the amount that you have deposited in the secured card.

You will pay interest on the amount of credit you enjoy and all this will help you reestablish your reputation in the market. It is important to choose a secured credit card from a reputed company that offers a generous terms and conditions. The last thing you want is to choose the wrong secured card and end up with an even worse for credit report or credit score.

The best place to search for such a secured credit card is the World Wide Web. You can check out the various features and options offered by different companies and choose the best one that suits your requirements and financial needs.

Banks offer credit cards for college students for a very simple reason; they want to be able to introduce their brand to these college students so that once these students are already working, they would now choose financial institutions which they are familiar with. Another reason is that they could immediately build a credit reputation. In order to promote this, most credit cards that are being offered to college students include low interest rates, no transaction fees, and other packages the a student might need.

We are all familiar with the importance of building a great credit as soon as possible. It would allow us to make big purchases both for our basic necessities and our heartfelt desires. This could also give us the power to purchase other things or services that we might need in the future. By having a plastic card at a young age, you will be able to build a good credit thus investing for future purposes.

Now, what would be the best plastic for a college student? The best card must offer rewards points, low interest rate, and possibly a discount on some services if I use their card. A type of credit card that will be useful for a student is immediately a prepaid debit card or a secured credit card. A prepaid debit card has the same concept as a credit card; the only difference is that it has a pre loaded amount in the card. The pre loaded amount is the one that is being decreased every time you purchase it, this would mean that there will be no bills and no interest rates. The amount you put into the card is your only limit, a perfect card for people with bad credit and also students.

The secured card, on the other hand, requires you to deposit a certain amount before you could use it. The amount you deposited would be the predetermined limit of the card; the concept is that you told the bank the maximum amount that you can afford to pay. Perfect for teaching people their credit limit and also teaching them a sense of responsibility. This type of card could eliminate your chances of having a record of a bad credit history while at college.