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Contributor
credit911
Posts: 91
Registered: ‎06-02-2008

Credit Cards after BK

I filed chapter 7 BK a couple of years ago, discharged in November 07. Currently all I have is one Visa Card with a $200 limit from Orchard Bank (secured card). For those of you who have been down this road recently what cards have you gotten to help your credit get back into shape and what do you think of them? I know I need to get more than one credit card to help my credit out.

 

I don't think I have fully gotten over the trauma of my BK yet. I am still basically using only cash for everything I buy and I know this is not good for my credit. I have such a fear of applying for anything since I am sure I am going to get denied anyway. Thanks in advance for any help or advice!

Senior Contributor
smallfry
Posts: 4,831
Registered: ‎04-20-2007

Re: Credit Cards after BK

Capital One. Try not to go full app crazy here. Avoid chasing the junk jewelry lines of credit. You need a store card for your FICO mix of credit buy maybe a credit card then wait a while. 
New Contributor
MarkRabo
Posts: 66
Registered: ‎08-30-2008

Re: Credit Cards after BK

[ Edited ]

Credit911,

 

First, you may want to check out this thread:

http://ficoforums.myfico.com/fico/board/message?board.id=creditcard&thread.id=207&view=by_date_ascen...

 

Second, I've been down the same road you have.  My Ch7 BK was discharged in January 2006, and for about 20 months afterwards, the only ways I paid for anything was either with cash, check or a debit card.  The main reason was that I first needed to get back in the habit of only paying for things I needed and could afford; up until March 2007, I wasn't making a whole lof of money (after the mortgage, taxes and expenses, I was lucky if I had $300 left over in a given month).  Once I had a really good-paying job, then I knew I could think about re-entering the world of credit cards.

 

Here are the three cards I have:

  • Juniper MC: This was the very first card I got (September 2007, after I had held a good-paying job for six months).  They have me CLIs in 3/08 and 9/08 but not 3/09; furthermore, they jacked my rate from 9% to 15% a few months ago.  I understand that Juniper offers several cards that seemed to be more lenient than others--the US Airways and Carnival Cruise Lines ones spring to mind--but the one I got was the regular one.
  • WalMart Discover Card: I found out about this one through the thread I linked above.  GE Money Bank (the card's issuer) was, at that time, known for being easy to get credit from (I don't know if they're that way now).  Got that card in 5/08; got my first CLI in 12/08.
  • Cabela's Visa: This was also from the above thread.  They used to give out credit like candy, obviously with the credit crunch they aren't so generous now; they did give me a $1000 CL in 10/08 and I hope I can get a CLI from them in 11/09 (they only give out CLIs every 12 months and make you fill out a CLI request form that is similar to the one you filled out when you got the card in the first place).

 

The keys are to pay your balances in full every month if you can--the interest can snowball on you if you just pay the minimum--and keep the credit utilization-to-credit limit ratio low (even with the cards I have above, all are low-limit--the first two, I have $1,650 CLs on each; for that reason, I don't use them to buy expensive items like a range or an HDTV, I'm afraid if I do, the CL on the card I use will get reduced due to a high usage-to-limit ratio).

Message Edited by MarkRabo on 05-09-2009 10:47 AM

Starting Score: 677 EQ (1/21/09)/705 TU (1/21/09)/714 EXP (1/21/09)
Current Score: 707 EQ (9/21/10)/720 TU (3/27/10)/Darn you EXP
Goal Score: 720 on all three by end of 2010


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Valued Contributor
Scamp
Posts: 2,791
Registered: ‎03-18-2007

Re: Credit Cards after BK


credit911 wrote:

I filed chapter 7 BK a couple of years ago, discharged in November 07. Currently all I have is one Visa Card with a $200 limit from Orchard Bank (secured card). For those of you who have been down this road recently what cards have you gotten to help your credit get back into shape and what do you think of them? I know I need to get more than one credit card to help my credit out.

 

I don't think I have fully gotten over the trauma of my BK yet. I am still basically using only cash for everything I buy and I know this is not good for my credit. I have such a fear of applying for anything since I am sure I am going to get denied anyway. Thanks in advance for any help or advice!


 

The above posts are both good and useful answers. 

 

My two cents on this, based on my own rebuilding experience, would be to ask if you have the means to put at least $1K down for a decent-CL secured card and a good relationship with a bank or CU, and if the answer to both is 'yes', go talk to them about what they might be willing/able to offer you in the way of a CC.  While it's unlikely they'd offer you unsecured credit quite yet, a lender who already has your checking/savings accounts/other may be willing to work with you on a secured card. 

 

It's a bit less traumatic to pull one of your own reports and/or scores, go into your local branch and talk to someone, show them the report, explain your situation and your goals, and ask what they can do to help you than it is to go apping here and there and possibly wasting inqs getting rejected.  Even if your bank/CU can't immediately offer you even a secured card, chances are they can tell you what you need to do in order to become approve-able for one, which would give you a game plan and some hope.  If they feel tentatively that you could get some kind of card with them based on the report you show them, then I think it'd be worth a hard inq to go ahead and apply.

 

I did this with a single $1K secured card which is now an unsecured $3,100.00 card 4 years later (WF is a bit tighter with CLI's than some others).  In addition, after a year of that secured card reporting (and its graduating to unsecured with a CLI of $500), I had scores in the low 700s and was able to successfully apply for a Macy's store card, a Chase airline miles card, and an AmEx charge card.  I recommend that $1K partly because it's easier to control your reported util on a higher CL, and also because it shows you can handle a 'grown-up' (if only starter-level) CL.

 

If you don't have that banking relationship established anywhere yet, then research a bit, pick a banking institution (CU's seem to be a bit more willing to work with folks who have not-great credit and are trying to rebuild), and set yourself up with them - at least a savings account, maybe checking as well (though it doesn't affect scores/reports directly, I personally feel that if your bank sees you can handle a checking account responsibly plus tuck away savings regularly, then they're more likely to take a chance on a cc with you, at some point, even post-BK).

 

Hope this helps, and good luck!

_____________________________________________________________________________
It's never too late to become the person you might have been. ~George Eliot

02/12/09 EX: 701 / 02/08/10 EQ: 719 / 02/08/10 TU: 723

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