The Short Answer
After using a secured credit card for at least a year, your next step is to apply for an unsecured credit card — one that doesn't require you to put up cash or other collateral. This is a natural progression in rebuilding your credit after bankruptcy, and the positive payment history you've built on your secured card is exactly what makes you a more attractive candidate to unsecured lenders. Getting an unsecured card and using it responsibly signals to the credit bureaus that you can manage credit without a safety net. Tools like CreditCardGuide.com can help you compare options and find a card that fits where you are right now.
“Rebuilding Your Credit After Bankruptcy in 6 Steps” is a series of posts that will appear over the course of the next couple of weeks. Following these 6 steps will help you lay the foundation to achieve better credit. Here are the six steps:
Step #1: Review Your Credit Reports
Step #2: Get a Secured Credit Card
Step #3: Get an Unsecured Credit Card
Step #4: Pay Your Monthly Bills, On Time and Every Month
Step #5: When Appropriate, Get and Pay a Mortgage Payment or Car Loan
Step #6: After Seven (7) Years Ask the Credit Bureaus to Remove the Bankruptcy Off of Your Credit Report
After you’ve spent time laying the foundation for your new credit by using a secured credit card you will want to begin looking for an unsecured credit card. An unsecured credit card is a card where you do not put up collateral (cash, automobiles, etc.) as an assurance that you will pay. We typically recommend that you use a secured credit card for at least one year before moving on to an unsecured card. Sites like www.CreditCardGuide.com or www.CreditCardTuneUp.com will allow you to browse a number of different types of unsecured credit cards. Regardless, at the appropriate time take the next step to get an unsecured credit card.
Key Takeaways
- An unsecured credit card requires no collateral — you're borrowing based on your creditworthiness alone, not a cash deposit.
- Wait at least one year of responsible secured card use before applying for an unsecured card to improve your approval odds.
- The on-time payment history you built with a secured card is your strongest asset when applying for unsecured credit after bankruptcy.
- Comparison sites like CreditCardGuide.com let you browse multiple unsecured card options and find terms suited to someone rebuilding credit.
- Getting an unsecured card is a milestone — it shows lenders and credit bureaus you've re-established a track record of responsible credit use.
- Keep your balance low relative to your credit limit on any unsecured card; high utilization can undercut the credit score progress you've worked hard to build.
Attorney Insight
The mistake I see most often at this stage is clients jumping to an unsecured card too soon — sometimes just two or three months after their discharge — and getting rejected repeatedly. Each hard inquiry from a denied application can nudge your score down at exactly the moment you're trying to build it up. Give the secured card a full year to do its job first. The clients I've watched rebuild credit the fastest are the ones who were patient about this step and let their payment history do the heavy lifting before they applied.
