How Long After Bankruptcy Can I Get a Credit Card?

If you’re like thousands of Americans who have had their debt discharged through bankruptcy, you might be wondering how long after bankruptcy can you get a credit card? Having a credit card is essential for things, such as paying your bills and shopping for groceries. We will answer this question in much detail below.

How Long After Bankruptcy Can I Get a Credit Card?

You can apply for a regular credit card after filing for bankruptcy, but there is a big chance that you will be denied. The best option for getting a credit card after bankruptcy is to apply for a secured credit card. Secured credit cards are much easier to obtain than regular unsecured credit cards.

If you apply for a regular credit card after filing for bankruptcy, you are likely to be denied because bankruptcy is one of the most negative marks that can be added to your credit report. Also, if you’ve had your debt discharged, you probably noticed a significant drop in your credit score.

When lenders review your credit report to approve you for a credit card, they will be very hesitant to offer you a credit card because you’ve mishandled your finances in the past and are therefore highly likely to default on paying back your credit card.

That said, if you have been denied a regular unsecured credit card after filing for bankruptcy, you should explore the option of applying for a secured credit card.

Secured credit cards function the same way as do regular unsecured credit cards, the only difference is that to qualify for a secured credit card, you must place a security deposit (sum of money) with the card issuer to qualify for the credit card.

Your security deposit will typically determine your credit limit. For example, if you place a $700 security deposit, you will be approved for a credit card with a $700 limit. If you make your payments on time for 12 months, many card issuers will refund your security deposit and convert your credit card into a regular unsecured credit card.

So, if you were wondering how long after bankruptcy can you get a credit card, you can get a secured credit card directly after having your debt discharged by bankruptcy.

How Will Bankruptcy Affect Your Ability to Obtain a Credit Card?

To answer this question, we should first discuss the impact that a bankruptcy has on your credit. Filing for bankruptcy is one of the most negative things that can happen to your credit. Many visitors often believe that bankruptcy clears their credit of old debt, but that’s not the case.

After you file for bankruptcy, the bankruptcy is added to your credit report and will cause a significant drop in your credit score. Some consumers have reported a point drop of over 150 points.

This significant point drop and the fact that bankruptcy appears on your credit report will make it difficult, if not impossible, to qualify for a regular unsecured credit card after filing for bankruptcy, especially if you’re applying directly after filing for bankruptcy.

That said, as the bankruptcy ages, your credit score will recover and you may be approved for regular credit cards. That said, you should keep in mind that a Chapter 7 bankruptcy will remain on your credit report for 10 years from the date that you filed for bankruptcy.

Having said that, a bankruptcy will have the biggest negative impact on your credit score when you first file, as the bankruptcy ages, your credit score will recover slowly. Some consumers have reported being to achieve a 700 credit score in as little as 24 months after filing for bankruptcy.

If you apply for a regular credit card after filing for bankruptcy, you may be denied. If you’re denied, you can always apply for a secured credit card. Secured credit cards work the same way as do regular credit cards, the only difference is that you will have to pay a security deposit to qualify.

Using Credit Cards to Improve Your Credit After Filing For Bankruptcy

If you have filed for bankruptcy and you want to improve your credit, you can use a secured credit card to rebuild your credit. To improve your credit using a secured credit card, you first need to apply for a secured card, pay your security deposit, and wait to receive your card in the mail.

Once you have your secured credit card, you should use it responsibly. You can do this by only charging as much as you can afford to pay off at the end of each month. Also, for a secured card to help your credit, you must make all of your payments in full and on time.

Usually, card issuers review secured credit card accounts on annual basis, if the card issuers sees that you’ve been making your payments on time and are using your credit card responsibly by keeping your balance low, the card issuer may refund you your deposit and convert your account into a regular unsecured credit card.

When it comes to your credit, your secured credit card account status is reported to the credit reporting bureaus just as would a regular credit card. By making your payments on time, you’re building good credit history behind this account.

This is why opening and properly using a secured card is a great way to establish a good credit history. So, if you want a credit card after filing for bankruptcy, a secured credit is the best option for you.

Both Bank of America and Discover offer great secured credit cards that you can apply for you to begin rebuilding your credit.

An Alternative To Getting a Credit Card After Filing For Bankruptcy

If you are unable to qualify for a regular credit and a secured credit card, yet you still want to have a credit card, you should explore the option of adding yourself as an authorized user on another person’s credit card. That said, once you add yourself as an authorized user to another person’s credit card, their credit card’s history will appear on your credit report. As such, you should only place yourself as an authorized user on a person’s credit card that you trust and know is responsible enough to continue making timely payments on his account. This is so because if he fails to make a payment on the credit card, the negative information will appear on your credit report, lowering your credit score.

Credit Score Planet Frequently Asked Questions (FAQs)

1. How long after chapter 7 can I get a credit card?

Getting a regular credit directly after chapter 7 bankruptcy is very difficult, this is so because a bankruptcy was just added to your credit report and your credit score likely took a big hit after your bankruptcy. That said, you should explore the option of applying for a secured credit card, they are much easier to get since the bank is taking little risk by taking a cash deposit from you.

2. How long after bankruptcy can you get credit?

You may be able to get a secured credit card directly after filing for bankruptcy and having your debt discharged. However, getting a regular credit card will be extremely difficult directly after a chapter 7 bankruptcy.

3. How long does it take to build credit after chapter 7 bankruptcy?

It will take you approximately 24 months to build good credit after filing chapter 7 bankruptcy and that’s only if you follow the best practices and open a secured credit card to start building good credit.

4. Will my credit score go up after chapter 7 discharge?

No, after a chapter 7 discharge, your credit score is likely to suffer a huge drop. This is so because bankruptcy is the most negative mark that can be added to your credit report.