How Do I Rebuild Credit After a Bankruptcy?

Over 1.5 million people file bankruptcy every year.  And, that number isn’t going down…it’s going up.  If you’ve filed bankruptcy and it has been discharged, what should you do next to get back in the right track?

Tip #1 – About 60-90 days after your bankruptcy has been discharged you should pull all of your credit reports.  Doing this will help you to see exactly how your creditors are reporting the debts, which were included in the bankruptcy.  You will want to check for accuracy on this, because the credit bureaus and creditors do make errors.  Accuracy means no balances, no past due amounts and no late payments that post date the discharge of the bankruptcy.

Tip #2 – Start the journey of rebuilding your credit.  You are going to want to start with getting new credit because you need something good on your credit reports.  This can be a double-edged sword, because it may have been too much debt that got you into the trouble that made you file bankruptcy.  (Or it could have been something totally different and unrelated to poor credit management)

A very good way to start rebuilding credit may be to get a secured credit card.  What is a secured card?  You deposit money with a bank and the bank opens a credit card for you to use against your own money.  The credit limit is an amount equal to your deposit.  After a certain time period you will be allowed to remove the security off the card.  A secured credit card is not for use long term but it does serve a short term purpose…getting something good on your credit reports.

Tip #3 – Create a reasonable budget.  You don’t want to go on a shopping spree just because you’re debt free because of the bankruptcy.  You are going to want to be frugal and make sure you have a saving’s plan in place.  Now more than ever you are going to need to have back-up cash for when a crisis arises because bankruptcy isn’t going to be an option for you again for many years.

Tip #4 – Make sure you pay all your bills on time.  You have to show that you have learned from your mistakes and the easiest way of doing this is to pay your bills when they are due.  The last thing a lender wants to see is a late payment or a collection after a bankruptcy.

Do these things soon after your discharge and you’ll be surprised how quickly your credit will improve.

John Ulzheimer is the President of Consumer Education at, the credit blogger for, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and, John is the only recognized credit expert who actually comes from the credit industry.

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