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5 Ways You Can Rebuild Your Credit After Bankruptcy

Filing for bankruptcy can take a real toll, but it is actually possible to rebuild your credit if you take certain steps and proceed wisely.   You’ll have to wait until you receive your “bankruptcy discharge”, the document that officially clears you from your bankrupt status, as this is the document most potential lenders will want to see before they agree to give you a loan.  Once you have your discharge, you can then begin on the road to healthy credit.

Here are 5 ways to rebuild credit after bankruptcy:

Step 1:  Acquire Secured Credit Cards.   It may be easier for individuals who have filed for bankruptcy to qualify for a secured credit card.  To get a secured card you simply deposit a set amount into a savings account and the loan is drawn against that account, for the same exact amount.  That way the bank or credit union is guaranteed that you have the money to pay it off.   The minimum and maximum deposit amounts will vary from one bank to another but you can often start out on one level and be upgraded to another after several months of making regular payments.  Some banks will even upgrade you to an unsecured card after a set amount of time.

Step 2:  Obtain an installment loan.  Like secured credit cards, installment loans are relatively small loans with a set term and payment that can be easier to manage than rotating loans.  The easiest way for an individual coming out of bankruptcy to acquire this type of financing is with an auto loan.  In most cases, it is possible to finance a car the day after filing for bankruptcy, as opposed to the 18 to 24 months it might take to secure a mortgage.  So provided you can muster the funds to pay for it, buying a car may be your ticket to repairing that damaged credit score.

Step 3:  Open up retail or gas credit cards.  This may be a little more difficult with the specter of bankruptcy on your financial record, but getting a card from a retail store or gas station is still an option.    If you can get past the scrutiny of the financial institutions that issue these cards, they can help you to clear your record.

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Step 4:  Watch out for unusually high fees.  Often, when dealing with individuals who have filed for bankruptcy, lenders will charge higher than usual rates or additional fees.  This is understandable to an extent, as they are concerned about the viability of the return on their loan, but you want to make sure that they aren’t trying to choke you with fees or you could end up right back in dire financial straits again.

Step 5:  Check your credit score.  The best way to ensure that you are back on good financial footing is to be aware of exactly what your credit score is and where any problems may lie.  You also want to make sure that there aren’t any errors in your credit report that could have a negative effect on your credit rating.


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Bankruptcy is never easy to face but it doesn’t have to mean the end of your good credit score.  You can build your credit rating back up and get back on solid financial ground through careful budgeting, wise spending and good credit management. With a firm hand on your budget, you’ll be able to wipe that slate clean and get back to being a healthy financial risk so that lenders will beat a path to your door once again.

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