No credit card required
Browse credit cards from a variety of issuers to see if there's a better card for you.
@DaveSignal wrote:
yes, i missed that you were also taking an installment loan. That will help. A secured card would add some revolving history and make your rebuild faster.
I agree. The installment loan is good but you do need some revolving credit. Im not sure how much you were going to make the loan for but maybe you could use some of that money to open up a secured card. The starting deposit is anywhere from $49 (capital one) to $500. Good luck!
Wait until your discharge until applying for any credit. An installment loan and a couple of revolving credit tradelines will be a sufficient foundation on which to rebuild your credit. I like that you have bought into the idea of buying an auto that you can afford without any financing. That is a huge step in the right direction ... literally and mentally. I wish you great success going forward ... especially in the employment area.
I went credit free for a whole year after my BK, except for my student loans of course. It's really not that difficult. I probably would have gone longer but after a couple cheaper used cars that I had purchased were costing more money to maintain than they were worth I finally decided to finance something. Waiting a year after my BK and making all of my student loan payments helped me finance through my credit union at a great interest rate. I thought going completely credit free was a great idea and since I could afford to pay cash for mostly everything I needed I never even thought about applying for a credit card or anything else until I talked with my loan officer while doing my auto loan. She told me that my credit was decent post BK since I had been making all of my student loan payments on time, but that I really needed a few more TL's if I wanted it to continue to improve.
After I financed my vehicle I kind of ignored her advice for a few months. I was perfectly happy living credit free, minus my student loans of course and my newly financed truck which was affordable enough that I knew I could make the payment on for a while even if I became unemployed or something.
But then I was almost passed over for a promotion at my work because of my credit score. After several discussions with my bosses I was able to get the promotion but it made me realize that I really needed to rebuild my credit. I went back to the credit union and they gave me an unsecured Visa and I also responded to a pre approved letter from Credit One and got another unsecured Visa. I now have several student loans, my auto loan, 2 cc's, and a few open counts that were in good standing prior my BK. My scores have continued to rise a little almost every month.
I think my credit free year of BK did help me considerably though. Although I now have a few open lines of credit, I continue to basically live credit free and I think it is due to that whole year I spent focusing on never buying what I couldn't afford to pay cash for. Now, even though I have available credit I am not even tempted to make a purchase that I know I can't pay off by the end of that month. I still pay for almost everything in cash now.. Well actually I use my Visa from my credit union for a lot of stuff because it has some pretty great rewards, but as soon as I get home I transfer the money from my checking account right to the cc so it's pretty much the same thing.
Your credit free plan may teach you some great things and help you make sure you keep your finances in order. However, after what my loan officer at my credit union told me and almost being passed up from a great promotion it became apparent to me that you can both go credit free and rebuild your credit at the same time. I am perfectly happy with my choice to go credit free for a whole year, but I really wish I would have started sooner because I'm sure I could have added another 50 points or so to my credit score had I started sooner. Whatever you choose to do I wish you good luck. Just remember that rebuilding your credit score is very important. It affects your auto insurance, cell phone bills, utility deposits, employment and many other things. Just because you get some credit after BK doesn't mean you have to use it more than for a few small purchases every month to get your scores up.
Again, good luck on whatever you choose!
Thanks Guys! I really appreciate your advice!
@ezdriver thank you that means alot to me! its been a very tough road.@Mj, I can relate to the job thing because of my credit being so bad, I rarely can even get to the interview process. I am pretty sure that I havent even been considered for job positions because of it. ( another reason for filing BK7 ) But your credit free year is very inspiring. Before I got into all this debt I saw credit as a way to get something now that i can pay off later, I paid the minimum thinking "hey im paying my bill on time" but now I know that is not how it works. lol
I ordered Dave Ramsey's Total Money Makeover, So I will be reading that, but I think with you all's advice I figured out a better plan for after My BK is discharged.
1. Check credit report for errors & dispute ( via Bk to 700 guide)
2. Obtain a secured card from credit union (use it for gas only)
3. Obtain a credit builder loan ( My credit union does not require a deposit. they will put the money in a CD for me)
I wont apply for anymore credit for about 6 months, hopefully by then I will have a better job (fingers crossed) and THEN
I will continue with SoulMaster's guide starting with the Capital One app.
I think that might be good to start off with, what do you guys think?
Thanks for all the help!
@alanae1809 wrote:
I'm kind of new here but I've been taking in a lot of information lately and I've come up with a plan to keep me on track after my bk7 is discharged.
Following the advice of the members, family and friends, after I surrender my car I will be buying a beater PAYING IN FULL so that I will not have to have a car note. Just going to make sure it's reliable!
The challenge would be to go " credit free " for 6 months.
I did plan on following SoulMasters guide to build my credit, but until I find a better job ( my income is not where I want it to be right now and I feel applying for credit cards will set me up for failure) I will not apply for credit. I will however obtain my credit builder loan!
I realize this may not be suitable for everyone's situation but it could be an option for those who may get themselves into trouble applying/using credit. I will resume SoulMasters plan after 6 months IF and only if my income has increased ( trying to live within my means ) and I feel comfortable using it.
Feel free to join me, I will give you all updates!
Hey there,
Just wanting to send some great energy your way! Congrats on your decisions to start again! I know you will do well this time and all the best to you!