How To Rebuild Your Credit Following Bankruptcy

How To Rebuild Your Credit Following Bankruptcy

Building your credit after bankruptcy can be a challenge. But it can definitely be done.

For many, filing for a Chapter 7 or a Chapter 13 bankruptcy is the only solution left to solve a financial problem. Yet, it comes with several repercussions — the biggest of which is its effect on one’s credit score.

When you file for bankruptcy, it will be listed for 10 years on your credit report. This means, of course, that you will have difficulty getting credit or a loan during that time since you will be viewed as a risky borrower.

But here’s the truth: filing for bankruptcy does not mean you will never be able to get credit again. And you can do this by restoring your credit. You can actually restore your credit immediately.

How do you do this? You can consider looking at credit repair services, as well as making sure your finances are in order so you can be a trustworthy borrower right away. Here are some other tips:

Fix your finances. Before anything else, make sure your finances are in order — since rebuilding credit will involve getting credit, and you can’t afford to miss any payment when you do. Create a budget, attend credit counseling (which can be availed via credit repair services) if necessary, build an emergency fund, and make sure you have good debt-to-income ration (basically, don’t borrow more than you earn in a month).

Assess the situation. Check your credit reports to see your credit score, as well as review any information that may not be accurate (it’s not unusually for credit reports to have some errors that could adversely affect your credit score). If you suspect (or, worse, find) any errors, you can contact credit repair services and dispute them so they can be corrected, hence improving your score.

Get a credit card or a loan. It may seem counter-intuitive to get a loan after filing a bankruptcy. But the only way for you to prove that you already have the capacity to pay your loans in the future, apart from having a good debt-to-income ratio, is by getting loan — and paying it on time and paying it well.

However, because of your credit score after the bankruptcy, you will have to deal with high-interest rates or collaterals.

You can consider getting a secured loan or secured credit card (which involves borrowing money against money you already have on your existing account). You can also get a co-signed loan or credit card. As the name suggests, this loan would require another person (with good credit standing) to co-sign the loan for you; he will be responsible for your debt if you end up not paying.

Make sure, however, that the bank or credit union you borrowed from reports credit activity to the country’ three biggest credit bureaus (namely, Experian, TransUnion and Equifax).

No more mistakes. It is possible to rebuild credit after filing for bankruptcy. But don’t dig your own grave, so to speak, but committing the same financial mistakes again while you restore your credit. What you do during this period will reflect on your credit score.

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The road to recover following a bankruptcy is a rough one. Visit and learn more from our experts. At, we have compiled the best tips for you.

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