How is a wall built? Brick by brick. And, just as a wall is built one brick at a time, credit is rebuilt one step at a time. This article will provide you with a practical guide to returning your credit to where it should be or where it was before you filed for bankruptcy.
The First Step
Get a Secured Credit Card
A secured credit card is a credit card that you can use the same way that you would use a regular, unsecured credit card. You can get a secured credit card simply by contacting a credit card company and explaining that you would like to rebuild your credit by starting off with a secured card. I find the honest and direct approach is best in these situations. I have had success with explaining to the credit card company that my client has completed a bankruptcy and is looking to demonstrate the ability to handle credit once again. Also, if it is true, explain that your financial life has changed. You would then send the credit card company the requested amount of money and they will issue you a secured card in that amount of money. You can then use that card like any other regular credit card to buy things at stores that accept credit cards up to the limit that you have paid to the credit card company.
Second Step
Use Your Secured Credit Card
Use your secured credit card to make payments for things that you buy, and pay off that card at the same time each month completely. Do not leave a balance unpaid on that card. Make this your entire reason for existing, that is, to pay off this card at the same time each month.
Third step
Ask for an Unsecured Credit Card
After some time has gone by, maybe six months or so, reach out to that same credit card company and explain that you have been making regular payments and would like an unsecured credit card in a low credit amount. They will probably give you the card, but if they don’t, ask them what you can do to increase your chances of obtaining a card in the near future. Once you’ve obtained your card use the same principles and practice that you developed in step one – Pay your card at the same time each month in full, and never, never, never leave a balance unpaid or pay late.
Give It Some Time
In the same way that you let six months or so pass with your secured credit card, do the same now with your unsecured credit card while following your rigorous repayment schedule. By following this strict repayment plan you will demonstrate to yourself and to the credit card company that you can be trusted with credit. While there is no guarantee that they will trust you with credit or increases in your credit limits, you certainly will demonstrate a pattern of trust and reliability and these are the patterns that are likely to get you an increase your credit line.
Repeat the Same Process Over Again
Once you let another 3 to 6 months pass while continuing to make timely payments in full on this unsecured credit card, call and request a second increase in your limit.
Rinse and Repeat
Ask for another credit increase after the same period of time has passed and continue to do this over and over again until you’re tired of doing it. By following this pattern, you will have established an ability to not be tempted by credit and to act responsibly with credit which makes you much more attractive to your current unsecured creditor and to future creditors. Following this practice also is very likely to improve your credit score as you will not have late payments or other negative impacts to your credit score. Following this approach is a nearly foolproof method of rebuilding your credit in Massachusetts. Good luck.
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