The People’s Lawyer

Can I get a loan or credit card after bankruptcy?

On Behalf of | Sep 14, 2020 | Firm News

People in northeastern West Virginia may someday find themselves in a terrible financial position where they are forced to decide which bills to pay each month, if they are able to pay any at all. They may wonder if filing for bankruptcy is the right thing to do, but they may also worry about how filing for bankruptcy will affect their credit in the future.

We cannot ignore the fact that, yes, filing for bankruptcy will affect your credit score for a number of years. Many people will want to up their credit score so they can get a home loan or car loan in the future. It is good to know then that you may have credit options even after bankruptcy, leading to a brighter financial future.

Secured loans

One credit option you may have after filing for bankruptcy is a secured loan from a credit union or community bank. There are two types of secured loans. In one type of secured loan, you borrow against funds you already have on deposit with the financial institution. You are not able to spend that money during the course of the loan. In the second type of secured loan, money is placed in a savings account, and you can access it after you pay it back. This can be a good choice if you do not have the cash upfront for a secured loan. Payments made on time and in full will be reported by the financial institution to credit bureaus.

Secured credit cards

With a secured credit card, you pay a deposit that constitutes your credit limit, and borrow against that. It may have annual fees and a high interest rate. However, oftentimes a person only needs to use a secured credit card for a short amount of time, until they are able to obtain an unsecured credit card.

Co-signed credit cards and authorized user status

Sometimes you may have a friend or relative whose credit score is good that is willing to co-sign a credit card with you. This may make you eligible for a credit card, and by making regular payments in full can rebuild your credit. Alternatively, you can ask to be an authorized user on a friend or relative’s credit card. As long as your payments are reported to credit bureaus, this could also slightly raise your credit score.

There is hope after bankruptcy

As this shows, there is hope after bankruptcy to rebuild your credit score. It may take some time, but the damage may not be as bad as you initially thought and repairing it may be easier than you think. Bankruptcy attorneys in northeastern West Virginia understand the struggles you are going through and may be a useful resource.