There is an optimum path to credit recovery after bankruptcy that consists on applying for some financial products one after another and using them moderately to increase your credit score by taking advantage of the fact that creditors report timely payments to credit bureaus and as these reports keep getting recorded into your credit history, they’ll contribute to boosting your chances to get approved for more complex financial products.

Credit Cards

Credit Cards are the best way to start to improve your credit card. But don’t expect to get approved for an unsecured credit card with a high amount limit right away. For starters, you need to apply for a secured credit card. You’ll need to make a deposit and then use the card just like a regular card. With the timely payments of your credit card balance, you’ll increase your credit score and improve your credit history.

Then you can request an unsecured credit card. You won’t get high credit limits, but you’ll still be able to use it to increase your credit score. Just remember not to abuse the financing feature. Try to pay the balance in whole every month so your credit score rises more quickly and your credit report doesn’t show outstanding debt.

Bankruptcy Loans

Getting a loan after bankruptcy can be complicated. Even if you get approved for a loan, you won’t get high amounts or very advantageous terms. However, it all depends on the type of loan you request. If you can provide collateral or a co-signer, you may be able to get loans for higher loan amounts and more beneficial loan conditions.

But, in the worst scenario, you’ll still be able to get a loan if you’ve followed the steps explained above about credit card use for improving credit. You should then request small unsecured loans that are not hard to get approved for. We are talking about only a couple of hundreds dollars that will contribute too to credit recovery.

Once approved for the loan you need to meet all your monthly payments on time and as the installments’ repayment gets recorded into your credit report, you’ll see how your credit gets better. Once the loan is repaid in full, you can request another one for a slightly higher amount and repeat the process several times to boost your chances to get approved for loans on better terms.

Nevertheless, if you can’t get approved for unsecured loans due to your credit, there are some options. You can continue using the credit improvement program based on credit cards explained above or provide collateral or a co-signer to get approved for a loan. If you can’t still get approved, you can open a bank account with an overdraft agreement and use the agreement to withdraw money and repay it in order to keep improving your credit situation.