Tips for Rebuilding Your Credit After Filing for Bankruptcy in Grand Rapids MI
You filed for bankruptcy protection because you were not able to pay all of your outstanding debts. Many people use bankruptcy as a means to a fresh financial start after a job loss, divorce or serious illness. After your Bankruptcy in Grand Rapids MI is discharged, though, you’ll find that it isn’t very easy to get credit without a very high interest rate. Over time and with good planning, you should be able to get a credit card with a reasonable interest rate and even a low interest rate mortgage.
The first thing to do is plan your budget. Take the information you learned in your second credit counseling session out and review it carefully. If you filed chapter 7 bankruptcy in Grand Rapids MI, you probably don’t have any credit cards. While you may get offers for credit cards in the mail soon after your bankruptcy is discharged, resist the urge to take one right away. These credit cards are marketed to high-risk customers and typically have very high interest rates and fees that will reduce your available credit and your checking account.
Eventually, you will need to get a credit card to reestablish your credit rating and increase your credit score. One of the best options is a secured credit card. Your bank may offer secured credit cards and that is a good place to start. Talk to your banker about your financial goals and listen to their advice. Your banker can tell you how to manage your secured credit card to increase your chances of getting approved for an unsecured card with a low interest rate in the future.
If your bank does not offer a secured credit card, carefully review the terms of other cards. While the interest rates may be similar, some banks charge higher fees than others. Whenever possible, select a card with no monthly fees and a reasonable annual fee. With a secured credit card, you will have access to an amount equal to the funds you have on deposit with the bank. Be sure to use the card wisely and only purchase things you can afford to pay for at the end of the billing cycle. By using your new card responsibly, your credit score will improve and you’ll become a better credit risk to banks and mortgage lenders.