If you’re thinking about discharging debt because you’re in over your head, it’s natural to be concerned about the hit your credit will take. Thankfully, a bankruptcy attorney can share various strategies for rebuilding your credit in the aftermath. One of the most effective approaches is applying for a secured credit card and then using is responsibly. 

How Does a Secured Card Work?

Unlike traditional credit cards, secured cards required cash deposits, which are usually equivalent to the total available credit. In other words, if you put $500 down, you’ll have a $500 spending limit. Should you stay on top of your monthly payments, you’ll eventually get this deposit back. 

Because there’s virtually no risk to lenders, secured cards are often available to those with bad or no credit. As such, using one responsibly is a great way to rebuild your credit following bankruptcy because it will likely be the only kind of financing you initially qualify for. 

How Will a Secured Card Help Rebuild Credit?

Using a secured card responsibly will show lenders that you can make regular monthly payments. Generally speaking, it takes about 12 months of making such payments to boost your credit enough to qualify for an unsecured card.

Depending on the terms of the account you opened, it may be possible to convert your secured card to a traditional credit card once your score is high enough. Traditional, unsecured accounts do not require cash deposits. If converting the line of credit is not an option, though, you can simply close the account and redeem the deposit before applying for a different, unsecured card. 

If you want to rebuild your credit even faster, your bankruptcy attorney may be able to share additional strategies for doing so. For example, it might be wise to become an authorized user on a loved one’s unsecured account. Asking your landlord to report every rent payment to the credit bureaus may also help. In other words, there are a number of ways to rebuild credit following bankruptcy, so it should be one of the least of your concerns if you’re in dire financial straits.  

To see if you’re a good candidate for discharging debt, turn to Ray T. Kennington, Attorney at Law. Practicing out of Ozark, AL, this seasoned bankruptcy attorney never judges his clients for the situations in which they find themselves. Instead, he aims to help them achieve much needed debt relief, so they can go on to thrive. To learn more about his experience in the legal field, visit his website. To request a consultation with this compassionate bankruptcy attorney, call (334) 445-1200.