SAN FRANCISCO (3/24/16)--After a bankruptcy, consumers can be challenged to be approved for a credit card. However, turning to a credit union might be the remedy, noted personal finance website NerdWallet.
A secured credit card--where consumers deposit an amount of money that equals the credit limit on the card--is one way to rebuild credit.
“Secured credit cards are obviously a good choice,” Carlos Colón, a financial education program manager for Mpowered, told NerdWallet. “Depending on the bank or credit union--and I like to advocate for credit unions because they are nonprofits--they may have some requirements in terms of how long the bankruptcy has passed.” Mpowered is a nonprofit financial coaching organization located in Lakewood, Colo.
According to data from the National Credit Union Administration, 37% of U.S. credit unions offer share-secured credit cards, and nearly two-thirds (65%) of members have access to such cards at their credit union.
Card issuers consider many factors--length of time since the bankruptcy, current income or credit score, among others--and larger issuers may have more stringent requirements.
Therefore, local credit unions are a good option for those recovering from a bankruptcy, said Colón.
“Local credit unions are often more lenient and accessible than a larger bank,” he said. “Just be sure to make sure the secured card reports to all three bureaus.”