Q: My wife and I have had an excellent payment history with very high credit for many years. We had to file bankruptcy 2.5 years ago because of real estate woes. Our bankruptcy has finally been discharged a couple of months ago and to our surprise both my wife and my credit score is right at 700. We have obtained a credit card from our local bank and have had it for several months. We pay it off almost every month. We would like to get another card for our business to earn cash back or airline miles. We were turned down for the airline card which supposedly only required good credit which is 650 or above. I assume it is because of our bankruptcy. My question is: If we apply for a card that requires only average credit can I assume we will be turned down again?
A: Just because one bank denied your request for a credit card, don't assume that another credit card issuer will automatically reject you as well.
Even with your bankruptcy, there are many credit cards for fair credit for which you can likely qualify, particularly since you indicated that your FICO credit score is now in the 700 range, which is very good. Perhaps the credit card you previously applied for simply had more stringent requirements than you suspected. Or maybe the company was relying more heavily on other approval factors, such as your income or your total existing debts.
It may sound counter-intuitive, but following a bankruptcy many people are actually bombarded with credit card offers. The reason: banks know that you can't file for bankruptcy protection again for years, so there's no way you'd be able to wipe out any new credit card debt in bankruptcy court.
If you haven't had credit card issuers beating a line to your door to offer you credit, you need to consider how well you've been managing credit and debt in the 2.5 years since your bankruptcy filing. Hopefully you have been paying all your bills on time and keeping new debt to a minimum.
You did not indicate whether your bankruptcy was a Chapter 7, in which you had your credit card debts eliminated, or a Chapter 13, under which you were required to pay off some or all of your debts over time.
However, I'm assuming your filing was the more common Chapter 7 bankruptcy, primarily because if you had undergone a Chapter 13, it typically requires three to five years to get a bankruptcy discharge. Additionally, you can't open new lines of credit in excess of $1,000 while you are in a Chapter 13 unless you receive prior approval from your bankruptcy trustee. Whatever the case, don't be discouraged or reluctant to apply for a new credit card if you truly need one.