Most people will find filing for bankruptcy a decision that is not easy to make. This is because their credit rating will suffer tremendously in effect making lenders view them as a bit of a bad risk. Indeed a person whose credit score after bankruptcy can be termed as good or one with an average score may see their credit score reduce by a margin to the extent of 100 points after a bankruptcy. The good news though is that a bankruptcy offers one a very good way of obtaining a new financial life. This is because one may still be able to obtain alternative methods of financing other than the traditional unsecured loans.
In this piece, we take a look at some of the alternative sources of financing that one may be able to turn to turn to after filing for bankruptcy. Take a look at the following ways of obtaining bad credit loans:
Secured Credit Cards
To begin reestablishing one’s credit it is advisable that you start small. Secured credit cards or bad credit personal loans can offer the best option for anyone with a bad credit wishing to obtain a credit card. To get this card, you will be required to pay a certain fee to the card issuer. The amount paid then acts as your line of credit. Depending on the credit company you sign up with, the limit to the amount you can access is in the region of between 100 to 200 percent of the amount you had deposited. Using secured credit cards has the following advantages:
The first advantage is that it offers you a chance to repair your credit. This advantage is not present when you decide to pay by cash only.
Secondly, it helps you begin to establish good ties with your credit card company. This is especially the case where you make all payments on the secured card on time. This may allow the credit provider to increase your credit line above the amount that you had deposited with them.
Thirdly, it also allows you to make purchases from stores that only accept cards. Where you do not have access to a debit card this option becomes useful.