Going through Chapter 7 bankruptcy can be daunting, but starting with a clean financial slate can help you move forward with confidence. However, one of the big negatives of a Chapter 7 bankruptcy is the effect that it has on your credit score.

To this end, many people who file bankruptcy want getting their credit score back on track. According to NerdWallet, a secured credit card can help a person with bad credit build good credit.

What makes secured credit cards different?

When people think of a credit card, they generally think of an unsecured credit card. An unsecured credit card has a maximum credit limit and zero collateral. On the other hand, a secured credit card requires a deposit, and then the deposit becomes the maximum limit for the credit card.

For instance, if you put down $500 as a deposit for a secured credit card, you will have a $500 maximum limit on that card. In the event that you do not pay the credit card issuer back, the issuer will then take the deposit to pay the debt.

How can a secured credit card help me with my credit score?

A secured credit card will help you prove to the credit bureaus that you are responsible with handling debt. The idea behind a secured credit card is to use it very sparingly and pay it off religiously. In turn, the credit company will report this to the credit bureaus and it will start to slowly improve your credit.

This process takes time, but with enough persistence and patience, many secured credit cards can become unsecured credit cards with good behavior.