Thu. Jan 27th, 2022

Bankruptcy should not mark the end of your credit score.

Rather, you should look at it as a way to start over. recover your credit reputation after bankcruptcy

A lot of people have succeeded in bouncing back from bankruptcy.

Once their bankruptcy case closes, they immediately start rebuilding their credit.  Many do it on their own, or some people hire professional credit restoration companies to help them.

Since we are talking about bankruptcy, I personally don’t feel that you need to hire a credit repair company.  There are some credit repair companies that claim to be able to remove a bankruptcy from your credit report.

The only way that works is if something was filed incorrectly.  And after that, it can be put back on once the inaccuracy is fixed.   It has to be a “GRIEVOUS” error or one that shows the person that filed may not have been you, to be removed permanently.

But I’m hoping you aren’t the sort of person that wants to spend time going after “pie in the sky” tactics like that.  Instead, you acknowledge the mistakes that lead to the bankruptcy and are here to start to rebuild your credit.

You too can succeed in restoring your credit score after filing for bankruptcy.

Tips to Restore Credit Reputation

1. Be optimistic.

Despite your recent financial trouble, you need to think positively. Your optimism will help you see the ways by which you can successfully rebuild your credit history. Dwelling on the negative can cause you to “stall” and not move forward.

Remember that your bankruptcy will only be on your credit for up to 10 years.  Yes, the first few years will be hard to obtain new credit, but not impossible.

Think of your bankruptcy as being given a second chance.


2. Learn from your credit mistakes.

By looking back at your experience, you can easily identify what went wrong. The realizations you will gain from this will strengthen your resolution to make necessary changes. For example, if your bankruptcy can be attributed to overspending, then you have to use and stick to a personal budget. If your problem is brought about by a sudden job loss, then you can establish an emergency fund. By learning from your experience, you can decide not to fall back into debt traps. This decision will surely help you rebuild your credit history.


3. Start Monitoring Your Credit Report.

You want to make sure that your bankruptcy has been recorded correctly.  Each debt that was covered in the bankruptcy should clearly be marked. If there are any accounts showing open that were included in the bankruptcy you need to contact your bankruptcy attorney and get that corrected.

You also want to make sure the date and amounts are correct.


You need to keep on top of this because you will find as time goes by, that many accounts that have been included in your bankruptcy are being reposted as delinquent accounts.

You need to IMMEDIATELY contact all 3 of the major credit reporting agencies with a copy of your bankruptcy paperwork.

Be aware that some unscrupulous collection companies buy old debt and they will try to add on debts that have been included in your bankruptcy.  Sometimes they may just change the amount owed to make it look like a different debt.

Never deal with them.  Contact the credit bureaus with your paperwork and have them remove it.  Make sure that you are clear you only had 1 account with the creditor and it was discharged in your bankruptcy and the correct amount.   We have had clients that have had to dispute the same accounts numerous times because of this practice.

Don’t pay them.  You may need to contact a credit attorney.  Sometimes these companies keep coming back and then sell your loan to another collection agency and the harassment starts all over.

4. Start Rebuilding Your Credit

You can only rebuild your credit history if you start using credit.  The only way to do that after filing for bankruptcy would be to sign up for a new secured credit card account.

A secured credit card is very easy to qualify for. In fact, many of them offer guaranteed approval, so you don’t have to worry about being turned down due to your prior bankruptcy.

A secured credit card is a credit card where your credit limit equals the amount of your security deposit.  So let’s say you send the bank $500.  Your credit card will have a credit limit of $500.  The bank will hold this security deposit for about 2 years and then turn your card into an unsecured credit card and SEND YOU BACK your security deposit!

So not only do you rebuild your credit, but you also have a nice saving account!

secured credit cards

When choosing a secured credit card here are a few things to think about.

  1. Choose one that lets you add to your initial deposit.  Not only will this help you build your credit, but it’s like a savings account too.  It also makes your account look more natural.  If you add to your security deposit every few months, it will look like the issuing bank gave you a credit limit increase.
  2. You want the secured credit card you choose to report to at least 1 of the major credit reporting bureaus.  Ideally, it should report to all 3
  3. Don’t get secured credit cards confused with catalog credit cards.  Catalog credit cards are a great way to build credit BUT you can only use them to buy merchandise within their catalog.  While a REAL secured credit card will have a Visa or Mastercard logo on it and can be used anywhere a regular credit card is used.

When you get approved for this credit card, make sure to make on-time payments. This is one of the keys to increase your credit score and to thoroughly rebuild your credit score.

There is no magic involved.  Using the card wisely and making on-time payments will put you on the road to high credit score success!


By Shelly Evans

Shelly Evans is a freelance writer and loan consultant. She specialize in writing articles about obtaining financing despite having bad credit. She has more than 16 years in consumer credit and collections and 4 years in business financing.

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