By Ken Lordis
It can be difficult to rebuild your credit profile after a bankruptcy, but it is also very important. And the faster you are able to establish good credit and show potential creditor that you can repay responsibly, the quicker you will be able to borrow money for more expensive items, such as a house or car. Rebuilding can be made easier if no debts remain after your bankruptcy.
Even though getting a prime credit card may be your ultimate goal, they can be almost impossible to get right out of bankruptcy. Here are some concrete steps that outline the best way to obtain credit cards after a bankruptcy.
* The very first thing to do is get a free copy of your credit report from Annual Credit Report. This report will show you what the lenders actually see when you apply for credit.
* The most important step to rebuild your credit profile - and work your way up to a prime card - is to start with a secured credit card. These are cards where you will deposit with the bank or company an amount of money that will equal your credit limit. You can use it as a credit card and replenish the balance as needed.
* Make timely payments on all of your other bills, particularly the new secured card - even though it's your own money - the banks report to the credit bureaus and that is what you want to happen.
* Do not try to check your credit rating by making applications to other credit lenders - this will stay on your report for up to two years.
* Modify your lifestyle to fit your budget. This is the most difficult, but if you take just 10% out of each paycheck and put it into a bank savings account, you will learn new habits and never have to worry about money problems. After all, that's what got you into trouble in the first place.
* After you have made timely payments on a secured card for some time, you can try applying for a few store cards.
Often a secured credit card is the best concrete step for someone who has had his or her bankruptcy discharged. If you're still going through the bankruptcy then you may not have the financial flexibility to set up a secured or prepaid credit card.
But remember, the more time between you and your bankruptcy discharge, the less risk to the lender. If your goal is to re-establish credit - then so start by learning what to do next - that's the only way to make things better for the future.
Ken Lordis is an expert in finance and business. He has been in the consulting arena for more than 30 years and has established his credentials by helping others reach their potential. As a corporate analyst, Ken has uncovered the common flaws that exist in the lifecycle of a business enterprise, which coincidentally, often parallel the same mistakes many people create in their personal financial life. Trying to fix something without knowing what it is can be difficult.
Ken has written many articles and commentaries on the economy, credit and business in general. To know more about this subject, the information is available at the following websites: http://www.bestcreditcardchoice.com or another site that he uses for business owners at http://www.probusinesshelp.com
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