Once you file for bankruptcy, till your debts are discharged you need to wait to apply for a credit card. Once your debts are discharged by the court completely or partially, you have no debts against your credit report but the bankruptcy will be reflected for ten years in your credit report. Therefore, your credit score is also negatively affected especially if is very high before filing for bankruptcy.
Since you are more likely not to file a bankruptcy again; therefore, you become eligible for a credit card as there is no debt against you now.
Now comes the question as to how the credit card issuers consider you for an unsecured credit card when you apply for it. They may out rightly reject you for premium products that have low rates and excellent rewards.
Here what you need to understand is that issuers take into account two main factors before considering someone as a potential customer—their credit rating and income. Since your credit score is bad you are already a suspect, because you didn’t pay your bills promptly the first time so what guarantee is there that you will pay this time? Of course, since there are no debts now you can pay your new loans easily, but still, this is not sufficient to see you as a good cardholder. A steady job with a fantastic income might help, but still, they will see you as a risk.
So you need to seek to look for cards that are designed for people like you who are in the same situation. Here you will find both secured and prepaid cards, but you need to choose secure cards against prepaid. This is because lenders report activity on the secured cards to the bureaus; and hence, you can build your reputation by using it smartly. Prepaid cards don’t usually report so you need to avoid them for now. Now you need cash for deposit so you should be ready to pay for the deposit. Few of the companies also charge other fees like processing fee and also expect you to put money as collateral.
Although the offers are not that good due to high-interest rates and annual fees, you have to start somewhere. So search online for cards after bankruptcy or credit loans after bankruptcy.
Now your primary goal after bankruptcy is to try and establish new credit with banks and credit unions. Even though you may get credit from finance companies, the credit line from a credit union or bank looks better to rebuild your credit.
In the beginning, banks and credit unions will give you lower credit limits. But soon your bad credit will start improving faster because while you are re-establishing with mainstream lenders, future lenders look more favorable on your application.
To rebuild credit you must use the new account perfectly. You simply can’t get it and leave it. You need to charge a little every month, and it is very essential to pay the whole balance before the due date. But if you use it right you can achieve your goal. If you can show that you are a responsible borrower, your credit reports and scores will instantly improve. Slowly, your bankruptcy will become a less factor until it goes off from your file forever.