Repair Your Credit After Bankruptcy

After your bankruptcy has finally been discharged by the federal courts and you have your discharge papers, what next? How do you begin to repair your credit? The first thing is to remember why you filed bankruptcy to begin with. You don't want to end up in the same financial situation again. The next step is to begin to rebuild your credit after bankruptcy, but where do you start.

Credit Report

Order your credit report from the three credit bureaus (TransUnion, Equifax and Experian) to learn exactly what's on your credit report and why. When a person requests his or her credit report, it is listed as a "soft inquiry" and doesn't count against your score.

To begin you must be educated about your credit rating, even if your rating is lower than you'd like it to be, is much better than being misinformed. If you never monitor your credit report, you won't know what's on there that doesn't belong, and that could be bringing down your score. You have the right to have anything that is incorrect reinvestigated and removed. That's the first step, get your credit reports cleaned up so that they reflect accurate information.

Pay Your Bills

Many people think, "I've got a bankruptcy, my credits ruined and it doesn't matter." This is not true, it does matter. Rebuilding credit after bankruptcy is not all that difficult and you may be able to do it faster than you may think. But you must pay your bills, all your bills, on time, all the time. Do not take on any obligations or debt that you cannot repay based on the terms you agreed to. This is the first step to rebuild your credit.

Applying For Credit

You should never do it, but especially now do not go around haphazardly applying for loans or credit of any kind. Every inquiry to your credit report except those made by you will lower your credit score even further. That's the last thing you need right now.

Remember, applying for a loan at one place may generate many inquiries. Many businesses will submit your credit application to many different lenders generating additional and unnecessary inquiries. Each one lowering your score.

Get A Credit Card

What do you mean get a credit card? That's what got me into this mess in the first place. Not true, you got yourself into this mess and not the credit card. Maybe the fact that you misused it, but not the card itself. There are many types of cards and you can qualify for one. What is the best credit card after bankruptcy? At this point it will most likely be a secured card but that's ok.

You need to begin to get some positive information on your credit report. If you want to rebuild your credit after bankruptcy, get a credit card even if you are required to secure it with savings. This is not so you can go on a spending spree. Remember how you got here. Use your new card conservatively and pay of the balance at the end of each billing cycle. If you can't do that don't use it.

Get A Car Loan

You've got to be joking. First a credit card now a car loan. If you want to rebuild your credit you can do it. You must get as much positive information on your credit report as you can. Get a car loan. You may need to save up a little money to use for a down payment but you can get a car loan right after your discharge.

Remember the part about paying your bills on time all the time. Start small get something you are certain you can afford to make the payments on. Do not go to a buy here pay here dealer. They generally do not report to the bureaus. There are dealers that use lenders that specialize in making loans to people with less than perfect credit. Some even offer guaranteed approval. Find one and buy a car you can afford. Be up front with the dealer about your situation, this will make buying a car a lot easier in the long run. Make certain that the lender they use reports to the bureaus.

Don't worry about the rate, its going to be high. Probably the state maximum but your timely payments will reflect positively on your credit report. If you can make extra payments go ahead and do it. Pay your car of early if you can. Then and only then trade it in and do it again. By now your well on your way to reestablishing yourself.


Filing Chapter 7 or 13 is not the end of the world, it only seems like it. You can recover but you must be patient. You didn't get here overnight and you can't fix it overnight. If you follow these steps you will be on your way. We have seen consumers with a one or two year old discharge and have a score around 700. It's just takes effort on your part and a little time to rebuild your credit after bankruptcy.

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