Once your bankruptcy is approved, you can immediately start working to improve your credit. Some options you may wish to consider when attempting to rebuild credit are to apply for a secured loan or a secured credit card.
Secured loans are most often offered at smaller banks or credit unions. The way they work is that you deposit a set amount of funds into an account and then borrow against what’s in it. As a benefit to you, the bank sends proof of your timely payments to credit bureaus.
When it comes to secured credit cards, companies that offer these often require you to pay a deposit to them. This amount ends up being your credit limit. These too can be applied for at credit unions or banks.
Financial experts warn that those applying for these cards should be cautious of the fact that they generally have high-interest rates and annual fees. This is why you’ll want to only use them to improve your credit enough to get an unsecured card. You’ll also want to make sure to confirm that all three credit bureaus will receive notification of your timely payment history. This is key to improving your overall credit score.
If you are leery of taking on an unsecured credit card or loan right away, then you may wish to start by asking someone you know and trust to consider adding you as either an authorized user or co-signer on their own credit card or loan.
Before becoming an authorized user, you’ll want to touch base with your new creditor to confirm that they’re willing to report your timely payments to the credit bureaus on your behalf.
Co-signing with someone is an option if the other person has a fairly high credit score to balance out your lower one. It’s important to understand that any amount that you or the other person total up in debt belongs to both of you.
If you’re drowning in debt and wondering what options may be available to you, then a Cincinnati attorney can advise you of what life after bankruptcy may look like.