Credit Cards Following Bankruptcy – Why It Is Crucial To Restore Your Credit Score Subsequent To A Bankruptcy
Even men and women with a bankruptcy on their credit report can obtain a credit score in the 700 area by acquiring lines of credit quickly following your bankruptcy. You might be asking yourself how an individual with a bankruptcy on his or her credit report can have a FICO rating in the seven-hundred range. It is all due to scorecards and the magic of credit cards.
The FICO rating system makes use of scorecards to categorize consumers. There are approximately 10-12 scorecards employed today. Your credit score is contingent upon which scorecard you match into. While no one understands for certain what the criteria are for each scorecard, the assumption is that there is one for folks with a bankruptcy, one for men and women with no credit history, etc. Within the bankruptcy scorecard, there is a range of customer profiles.
By getting a credit card immediately after your bankruptcy and paying it as agreed, you will place yourself in the higher range on the bankruptcy scorecard. There are shoppers who have the very greatest credit history among those who have filed for bankruptcy, with a credit score in the seven-hundred range. Yes, this is completely doable if you take the time to restore your credit immediately after your bankruptcy is discharged. It normally takes a year or two to get to this point, but it is well worth the time and work.
The best way to do this is with sub prime credit cards or a secured line of credit. The credit line does not make a difference as much as if the credit card company reports to the 3 credit reporting credit bureaus each month. As soon as you open up brand new lines of credit soon after your bankruptcy, you will be scored in accordance to other customers in your scorecard.
It is essential too that you set up lines of credit before your bankruptcy falls off your credit record. When your bankruptcy falls off your credit report, you go from being in the group of prime consumers who have filed for a bankruptcy to the low category of customers who have not filed for bankruptcy. The scoring approach is complicated, but constant. Lines of credit that are utilized responsibly will increase your credit score.
There are credit cards specifically geared for people with a bankruptcy on their credit report. Approval is normally guaranteed and there is an uncomplicated application approach. You will pay a higher interest rate, but there are no interest charges if you do not carry a balance. When your bankruptcy is discharged, you will get numerous unsolicited offers in the mail for both secured and unsecured credit cards. Once you discover the terms that are appropriate for you, sign up for your new credit card and commence to build your credit. You will be happy that you did!Bankruptcy, Credit Cards, Credit Repair, Credit score, Debt