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Using a Credit Card to Improve Credit Score After Bankruptcy

Filing bankruptcy is quite helpful in the sense that it eliminates all the debt and saves a person from humiliation and harassment but at the same time it has a negative impact on credit score. After bankruptcy a person needs to take some drastic measures to get back a good credit score. Credit cards play an important part in this regard. If you keep using credit cards efficiently and pay back the amount owed on time then your rating will start improving. This strategy may sound ironic to a person who filled bankruptcy because of uncontrollable credit card debt but it does work wonderfully.

After bankruptcy you may face difficulty in obtaining a credit card. It is because of the overall poor economic conditions which have made lenders very reluctant to lend money to risky parties. However, if you do your homework then you can find a card company which provides credit cards to people discharged in bankruptcy. The reason why some creditors don’t mind giving cards to bankrupt people is that they can charge more interest in such cases. Another reason is the Bankruptcy Abuse and Consumer Protection Act which forces people to file a bankruptcy just once in a long period of time. For example after filing a Chapter 7 bankruptcy a person can not file again in 8 years. Similarly the time period for Chapter 13 is 6 years. This rule gives the creditors some peace of mind.

If you can not get an ordinary credit card then you can try to get a secured card. This card works in a rather strange way. The person applying for such a card first deposits some money with the provider. This money becomes his credit limit and he can’t spend more than that. So what is the purpose of this card then? One can easily use cash instead of a “secured” card. The purpose is simple: To help people improve their credit rating. If you use cash then it will have no effect on your score. Whereas if you use a secured credit card then your score will start improving.

An important thing that you must keep in mind while applying for a credit card is that if the card company turns your application down then this will have a negative effect on your credit standing. Therefore, you should never apply for a card unless you are fully certain about the company’s policy regarding bankrupt people. You can contact the company to ask about their policy. Once you are sure that the company does issue credit cards to people discharged in bankruptcies then you can go ahead and submit your application.

Bankruptcy does have its drawbacks but they can always be fixed with a little effort. Credit cards can help you a lot in getting rid of a bad credit score. If you haven’t filed a bankruptcy in Tampa and are wondering whether you should do it or not then you must talk to a bankruptcy attorney. Go to http://bankruptcyattorneysintampa.com for articles and resources on different bankruptcy topics.

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