Rebuilding credit
If you're recently bankrupted or you need to drastically improve your scores, here are two things you need to keep in mind:
- Nothing in credit is "forever." A bankruptcy legally can remain on your credit report for up to 10 years, but its effect on your credit score can start to diminish the day your case is closed - if you adopt responsible credit habits such as paying your bills on time, using only a small portion of your available credit and not applying for too much credit at once.
- You have to get and use credit to build your credit score. Living on a cash-only basis may be a smart choice for those who really can't handle credit. But if you want to rebuild your credit score, you can't sit on the sidelines.
Secured credit cards
Everybody should have at least 4 tradelines for best credit profile. It is especially important for (re-) establishing credit following bankruptcy or when improving low scores. If you apply for a credit card and you are declined you will be no further ahead. (In fact you may be a little further behind because you have an inquiry on your credit report which can depress your score). Never mind that it is a downer. Nobody likes being rejected! Consider getting a secured credit card. Your credit limit will equal the deposit you lodge with the creditor, but it is reported as a credit card on your report. Below is a good option:
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