Life After Bankruptcy: Step Four – Rebuild Your Credit with a Secured Card - Westgate Law

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Life After Bankruptcy: Step Four – Rebuild Your Credit with a Secured Card

Many feel that after they’ve declared bankruptcy their life will never be the same. They’re completely right. It will be better. All the troublesome financial difficulties that made the bankruptcy necessary in the first place have been taken care of. Your bankruptcy has given you a fresh start to develop a healthy financial outlook.

What’s the first step? Letting Go of the Guilt

Bankruptcy doesn’t have to be a shameful event. Don’t hold on to any guilt you’ve been associating with filing. Consider it the solution to your financial problems. Avoid focusing on your regrets and instead focus on the positive – your healthy financial future.

What’s Step Two? Pause to Think 

Take a minute to think. Consider what your financial habits were before filing and what led you to bankruptcy in the first place. You don’t want to focus on regrets, but you also don’t want to repeat the past. Know what got you into trouble so you can avoid it in the future.

What’s Step Three? Knowing Your Budget and Paying On Time

Design a budget for yourself that is realistic – one that allows you to spend less than you’re earning and to set aside some cash for savings each month. In addition, pay all your current bills on time.

What’s Step Four? Rebuild Your Credit with a Secured Card

When attempting to rebuild your credit post-bankruptcy, it is key that you obtain a secured credit card from a reputable institution. A secured card requires that you, the cardholder, deposit your own money (for example $500) into an account at the institution. This deposit “secures” the card’s credit line. Your secured credit card’s credit limit will be equal to your deposit. Using a secured card and paying the balance off each month can help rebuild your credit.

Tips on Obtaining a Good Secured Credit Card:

#1: Stay away from secured cards that come with high fees.

#2: Verify that it reports your payment history to the credit bureaus.

#3: Avoid secured credit cards that provide you with 900#’s to get in touch.

Still have questions about rebuilding your credit post-bankruptcy? Talk to one of the bankruptcy experts at Westgate Law.

About the Author

Justin Harelik

Justin has a singular goal: to get people out of financial distress and move them to financial stability and prosperity. He does this by combining 15 years of in-depth experience in bankruptcy, credit management, debt negotiation and student loan modifications, and he does it with both English and Spanish-speaking clients.

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