A year after declaring bankruptcy and moving with her daughter into a home with her sister, Molly Graham is about to get a degree in nursing. As she starts out in a new career, she also wants to begin a new life—one built on a solid financial base. Molly will be starting out as a full-time nurse at a salary of $66,650 a year, and she plans to continue working at a second (part-time) nursing job with an annual income of $21,000. She’ll be paying back $24,000 in bankruptcy debts and wants to be able to move into an apartment within a year and then buy a condo or house in five years. 

Molly won’t have to pay rent for the time that she lives with her sister. She also will have child care at no cost, which will continue after she and her daughter are able to move out on their own. While the living arrangement with her sister is great financially, the accommodations are “tight,” and Molly’s work hours interfere with her sister’s routines. However, before Molly is able to make a move—even into a rented apartment—she’ll have to reestablish credit over and above paying off her bankruptcy debts. To rent the kind of place she’d like, she needs to have a good credit record for a year; to buy a home, she must sustain that credit standing for at least 3 to 5 years.

1. In addition to opening checking and savings accounts, what else might Molly do to begin establishing credit with a bank?

2. Although Molly is unlikely to be able to obtain a major bank credit card for at least a year, how might she begin establishing credit with local merchants?

3. What’s one way she might be able to obtain a bank credit card? Explain.

4. How often should Molly monitor her credit standing with credit reporting services?

5. What general advice would you offer for getting Molly back on track to a new life financially?