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After bankruptcy: don’t reject credit, learn from mistakes

For those who have been crippled with credit card in the past and who’ve been forced to file for bankruptcy to get out from under that weight, credit cards often take on a whole new significance. For some former debtors, the new perspective on credit cards is more responsible, more controlled. For others, the view of credit suffers enormously. It is not uncommon for some people to renounce credit altogether, or at least as much as possible.

While it isn’t our place to judge anybody’s spending habits from a moral perspective, it can be said with certainty that credit itself is not the problem for most people. It is the view of credit and how it is used. It is the perspective on debt that it tends to generate in some people, which is informed by poor mistakes in its use. In itself, credit is an important tool for achieving financial goals, and even financial success. And it is difficult to avoid using it altogether, though it can be done. 

After an individual completes the bankruptcy process, one of the biggest tasks on their plate is to rebuild their credit. Bankruptcies say on one’s credit score for 10 years, but one can begin immediately improving one’s situation. Perhaps to the dismay of some debtors, a great way to do this is to apply for a credit card and begin using it.

Many people start with a secured credit card after bankruptcy, which requires them to put down a deposit. Over time, one will be able to apply for unsecured credit cards. The key, of course, is learning from one’s mistakes. Payment history accounts for 35 percent of one’s credit score, so paying bills on time is critical when it comes to credit cards. 

Source: Forbes, “How I Paid Down $100K Of Debt,” Heather Bates & Ronda Kaysen, November 7, 2013. 

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