Credit can be a scary topic, especially for those who have recently filed for bankruptcy protection through the federal court system. Heading into the courtroom while feeling like a loser who can’t pay their bills, you say that you’ll never allow this situation to happen to you again. You’re going to pay cash for every purchase you make for the rest of your life, as credit cards will no longer have a home in your wallet, right?
Unfortunately, this ideal (even though it sounds wonderful) isn’t going to get you where that you want (or need) to be. You need credit to buy a home and to finance a nice car, just to name a few. Even if you’ve decided that you will never own a car that requires a loan and will live in an apartment for the rest of your life, your credit history will still effect you. Any potential landlords and employers might just ask you to sign an authorization to pull your credit reports... and they can (legally) base their decision to offer you employment and/or housing on what they see in your credit history.
So what are you to do? You need to rebuild your credit; it’s not an option. Credit is not bad, and neither are the cards that we get so freely, you just need to learn how to use them properly and remain in control. Here are some tips to help you get back onto the “credit horse” after falling off as hard as possible-with bankruptcy:
- Secured Credit Card - This is a great idea, especially for those with credit phobia, for you cannot go “buck wild” with the card without having the ability to pay for it. A secured card is one with a savings account attached directly to it, opened by you, and in your name. Your credit limit is a direct reflection of your savings account balance. For example, if you have $500 in a secured credit card savings account, you will have a credit limit of $500 on your credit card. You are expected to pay your bills on time each month, just like with a regular credit card. However, if you don’t pay as agreed, the payment will come out of your savings account, which will decrease your credit limit (of course, you don’t really want to do that, but it’s better than not having the means to pay the bill).
- Join a Credit Union - Credit Unions are like banks, except they are non-profit. They take all monies made and give it back to it’s “members” in forms of higher interest rates paid on accounts, lower interest rates on loans, and free services to all who join. An entire credit union exists solely for its members, not stockholders. Being a member yourself will give you the feeling of security, with a large group of people that might just be willing to help you out and offer you small loans to help you in your credit rebuilding process.
- Contact a Support Group or Two - One key point that you need to realize is that you are not alone! Every feeling, every fear, every knot in your stomach has been felt similarly by someone else. A support group, either live and in person (if available) or via the internet, is a perfect way to help you deal with what’s going on. Misery loves company, and the company is even better if they understand first-hand what you’re going through.
After completing the bankruptcy process comes a mourning period in which you will “grieve” about your situation and probably despise credit and all it stands for. But the time is going to come when you realize that life does go on. When that time comes, be sure to have your saddle and riding boots, and be ready to jump back onto the proverbial credit horse.
