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Although you can damage your credit by filing for bankruptcy, that doesn’t mean you aren’t still able to build it back up afterward. It’s always in a consumer’s best financial interest to have as high of credit as you can. There are many ways in which you can help to boost your credit. One such way is to obtain and use a credit card responsibly. While many don’t know this to be true, you can still obtain a credit card even after filing for bankruptcy. However, the credit cards for which you’re eligible may have different restrictions or rules to abide by.
Sub-prime Credit Cards
One common option for those with a low credit score is to apply for a sub-prime credit card. Sub-prime credit cards generally require that you provide a security deposit equal to the balance limit. Be aware that these cards may have poor interest rates and some issuers may take advantage of consumers, charging them with unnecessary fees.
How to Use Your Credit Card Responsibly
Unfortunately, it takes time, commitment, hard work, and consistency to rebuild your credit. Ultimately, as mentioned, to build your credit back up over time you must use your credit card responsibly. Here are some tips on how to do so.
- Don’t spend more than your allotted balance: Be aware of your card’s balance threshold. Sub-prime credit cards often have a lower balance threshold than other credit cards. Therefore it’s important to always be aware of your balance.
- Save for emergencies: Consider putting money into a savings account. You can do so through your usual bank, or with an app such as Digit. Ultimately you will want to have a minimum of 3 to 6 months worth of expenses saved in case of an emergency, but saving anything is better than nothing. When you build an emergency savings account, you won’t need to rely only on your credit card.
- Pay off your card immediately – or at least on time: Since (FICO says) your credit card payments account for 30 percent of your credit score, making payments on time is extremely important. One good method for paying off your card on time is to only use your card to spend something that you could use your Debit card on. In other words, only purchasing things that you would have the money for in your checking account. Then once you use the credit card to make the purchase, pay it off immediately. This helps you to build your credit without having to remember to pay anything later on.
Toronjo & Prosser Law Helps Those Who Are Dealing with Bankruptcy
It’s undoubtedly stressful to realize that you don’t have enough money, and even more stressful when you realize that filing for bankruptcy may be your best option. That’s why it’s so important to consult with a knowledgeable and experienced Dallas bankruptcy attorney. At Toronjo & Prosser, our qualified Texas Bankruptcy Attorneys can help you to navigate the process. To learn more or to schedule a free consultation contact us online or call us today!