Bankruptcy may prevent qualifying for a credit card

teal credit card digits close-up


Dear Experian,

How can I get a credit card after a bankruptcy so I can rebuild my credit?

-  MBD


Dear MBD,

If your bankruptcy was discharged recently, you may have to wait a while before you can qualify for a new credit card. A bankruptcy is the greatest indicator of risk in a credit report, and so has the most serious and long lasting impact on your ability to obtain new credit. Even if you can qualify, it might not be the kind of credit you should want.

There are anecdotes of people getting new credit almost immediately after declaring bankruptcy. What they never say is how high the fees or the interest rates were that they had to pay in order to open the account. If you have to pay extremely high fees or interest rates, it’s probably not an account you should want.

To start rebuilding, apply for a credit card with your bank or local credit union where you have an existing account. They may be more willing to work with you.

It may be necessary to open a secured credit card. A secured credit card is linked to a savings account, and your limit is typically a percentage of your account balance. You can then charge purchases on the card and make payments in order to demonstrate your ability to manage the card. If all payments are made on time, the lender may convert the secured card into a traditional credit card.

Be sure the lender you choose reports its accounts to the national credit reporting companies. If they do not report secured accounts, ask if they will report the account after it is converted to a standard credit card account.

Another option is to ask a family member or close friend if they would be willing to add you as an authorized user or joint account holder to one of their accounts. Many credit card companies will then begin reporting the account on your credit reports as well. As long as all payments are on time, it can also help you build your credit history.

I recommend that at least one account be retained through bankruptcy if you can avoid using it to spend more than you can afford. Keeping an open, active account will help rebuild your credit history after the bankruptcy is discharged.

Thanks for asking.

Rod Griffin
Director, Public Education

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