• 06
  • December
    2011

With the holiday season underway, many are worrying about how they will make ends meet. Credit is always a popular choice when funds aren't immediately available, but many do not have access to good credit.

Among those who may be facing credit struggles are those who've been through bankruptcy. Last year, 1.55 million Americans filed for bankruptcy, and likely many more weren't far from it. Bankruptcy often makes your credit score 200 points or more, and can be an obstacle to accessing credit. There are, unfortunately, not many options for those in this situation, but there is always the possibility of a new approach to celebrating the holiday.

The first thing you should do if you have a poor credit score is to ensure there are no errors in your credit report. It is not uncommon for credit reports to include mistakes which affect access to credit. If there are any errors, you should dispute and correct them.

One option that can be investigated is to obtain a secured credit card. These cards require you to put cash down to secure any debt, but for some this isn't possible. For those who have trouble getting a secured card, another option is to apply for a store credit card. Requirements for these cards are often less strict then bank cards.

Obtaining a personal loan is another option, but a bankruptcy can hinder your chances of obtaining a loan. Most lenders will require either collateral or an excellent credit rating.

It is generally a good idea to avoid low interest loans with high fees and other costs, as well as payday loans. The latter can often cost 300 percent or more in interest on an annual basis.

Perhaps the best option for those with credit problems this holiday season is to find creative ways to enjoy the season without feeling the need to spend much money. While this may not sound wonderful for those who equate spending with celebrating the season, it is likely the wisest option for those with credit troubles.

Source: Fox Business, "Broke? Bad Credit? Say Humbug to Lousy Holiday Loans," Gary Foreman, December 5, 2011.