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Rebuilding Credit and Post- Bankruptcy

By Janet Lacey
Published: Saturday, September 10th, 2011

Here are some important updates for all of us to consider regarding the general issue of credit.

Excellent credit scores and access to good credit cards of consumers are very much recognized by major lenders before they could lend money to the consumers. However, since the 9/11 attack, many companies were downsizing causing many card holders to be bankrupt. They have to use their credit cards to charge for their health insurances, food and other essentials for their daily living.

These consumers are now trying to rebuild their credit card. Is it possible that if card holders like to reconstruct their credit card can obtain two separates credit cards especially for couples?  Customers also that have gone bankrupt and trying to rebuild their credit card often ask which is better to get an unsecured card with a higher APR or a secured credit card with a lower APR.

As reported, the card holders were inquiring if they make on-time payments and pay off their balance very month, how long for them to rebuild their credit score and able to get a low interest from national lenders.

It is good news for customers who are bouncing back from bankruptcy that they can have a decent credit again within a year. However, the bad news is that even with improved credit, they are probably won’t be able to find the low-interest rate credit cards that they can find from their pre-bankruptcy days.

For the reason that the credit card world has changed drastically in the last two years. Card offers used to be plentiful. It is almost anyone with a mailing address could receive an unsecured credit card at a competitive interest rate. Now, card companies have tightened their standards in the wake of rising default rates and have raised interest rates even on reliable customers. According to a certain website, the average rate is now 15.39 percent, the highest in two years.

It is better for couples who like to repair their credit score if they would obtain individual credit cards. It is because when it comes to credit, separate accounts are usually better, unless one person’s credit is so poor that he needs a co-sponsor in order to take out a card, as is often the case for college students.

Joint credit scores give only a little gain as compared to separate cards. There could be a    potential downside if one person’s credit drags down the other person’s. Many couples also want to keep their credit accounts separate in case they divorce, in which case jointly held credit cards can become controversial issues.

Improving a credit score from bankruptcy will be after only a year of making on-time, regular payments. But it will take longer seven to 10 years for the card holder’s free credit report to fully recover from the stain of bankruptcy. By then, low-interest rate credit cards might have made a comeback.

Choosing to use an unsecured card with higher interest rate or a secured card with a lower one depends entirely on what the card holder are using it for.  If the card holder carries a balance then they should always go for the lowest-interest rate possible. It is found out that secured credit cards in many ways aren’t cards at all, but rather debit cards that give you the extra advantage of rebuilding your credit score.

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