Many people in Tennessee and beyond struggle to rebuild their credit scores after confronting serious financial crises. This is especially true for those who have filed for bankruptcy. Keeping several things in mind can help lay the groundwork to restore a credit rating. Each person’s financial situation is unique, which is why it is also a good idea to seek recommendations from someone well-versed in bankruptcy law and post-bankruptcy financial restoration.
Consider applying for a secured credit card
If a person has claimed bankruptcy within the past few years, it might be challenging to get a lender to approve a loan or credit card. However, a secured credit card is often an option for people in such circumstances. A security deposit is typically paid to the card issuer. This deposit is held and may be kept if the cardholder fails to make payments. Some secured credit cards carry a conversion option, which means that once a certain amount of time has passed, and the cardholder has made all necessary payments on the account, the card will convert to an unrestricted card.
Credit-builder loans help restore ratings after bankruptcy
Not every bank offers credit-building loans. For those that do, however, this can be a valuable tool for someone who is trying to rebuild credit after filing for bankruptcy. This is a unique type of loan. The applicant makes payments into an account for a certain period of time, then receives the total amount of cash back at the end of the term.
Rebuilding credit after bankruptcy cannot happen overnight. By making informed decisions and practicing good credit habits, most credit ratings can be restored within a few years.
