Bankruptcy doesn’t have to be a bad thing. Bankruptcy is your chance to break away from the burden of crushing debt and start your life anew. Fortunately, bankruptcy often comes with some lasting benefits such as improving a damaged credit score after filing. Here are three of the best ways to rebuild your credit after a bankruptcy.
Get a Secured Credit Card
Coming off a bankruptcy can be difficult. Especially when it comes to getting credit. Because of this, rebuilding your credit with a secured credit card may be a great option for you. Secured credit cards are credit cards which are – you guessed it – secured. What this means is that you make a deposit into a savings account, which is tied to the card and opens a secured line of credit.
Secured credit cards work by giving the holder of the card a line of credit equal to the amount deposited, minus fees. This means that if you were making a $500 deposit on a card with a $30 annual fee, your available line of credit would be $470.
By making timely monthly payments you can slowly rebuild your credit score with these cards. Just make sure that you always pay on time and try to use your card for small purchases. A good rule of thumb is to only use between 10 and 15 percent of your line of credit each month.
Secured loans are another great option for those looking to rebuild their credit after a bankruptcy. Secured loans usually come in two varieties and are generally offered by credit unions and other community banks.
The first type of secured loan involves borrowing money against a deposit. You would need to deposit a sum of money into a savings account at the bank and borrow against that amount. However, the money deposited would not be available to you while you are paying off the loan.
The second type of secured loan involves no up-front cash at all. With this type of secured loan, the money loaned to you by the bank is placed in a dedicated savings account, which will not be released to you unless regular payments are made. In return, the bank alerts the credit bureaus of any prompt payments made, thus raising your credit score.
Get a Co-Signer
Having a family member or someone you know co-sign for a loan or credit card is a great way to rebuild credit. Co-signing can be tricky, however, as it places an immense amount of trust in you by the other person. After all, they are placing their credit score on the line in case you do not make the payments required of you.
Work with Florida’s Largest Bankruptcy Lawyer Today
At the Law Offices of Patrick L. Cordero, we are proud to be the largest bankruptcy law firm in the entire state of Florida, third in the United States. Offering personalized attention to every client, we truly understand that your situation is unique. If you are considering applying for bankruptcy protection, regardless of the type, having an experienced lawyer on your side can go a long way.
Trust the Lawyer of the Decade, the Minority Lawyer of the Year, and the Largest Bankruptcy Firm in Florida, and we’ll work to get you the best financial outcome possible. Trust in the experienced and passionate legal team at The Law Offices of Patrick L. Cordero to help you. Call for a free, no-risk consultation today at (305) 445-4855.