How Do I Repair My Credit After Filing Bankruptcy?

A lot of clients I meet with assume that filing bankruptcy will destroy their credit and they will never be able to obtain a loan.  This is a bankruptcy myth.  Initially your credit score will drop due to your bankruptcy filing; however, most of my clients see an improvement in their credit score within 12 months of filing.  This is due to the fact that when you fall behind on your bills your creditors can report your delinquency each month to the credit bureaus, causing your credit score to continuously drop.  On the other hand when you file bankruptcy your credit score will take a significant hit but will improve over time.

Although bankruptcy may appear on your credit report for up to 10 years, you can begin improving your credit score immediately after receiving your bankruptcy discharge by completing some of the following steps:

Make sure your credit report accurately reflects your bankruptcy.

Review your credit report carefully and dispute any errors.  For a variety of reasons your credit report may not show all of your debt being discharged in bankruptcy.  If there is an outstanding balance your credit score could be taking a hit.  If your credit report does not reflect a $0 balance for the account, you can send a dispute to the credit bureaus to have your credit report updated.

Keep current on accounts that were not included in bankruptcy. 

For example, if you have a student loan or a reaffirmed car loan, you want to remain current on these loans to help improve your credit score over time.

Obtain new credit.

Obtaining new credit after filing bankruptcy is critical to rebuilding your credit score.  Many lenders will approve applicants with a history of bankruptcy, but if you are you are unable to obtain a traditional credit card, you may want obtain a secured credit card instead.  You should anticipate credit being more expensive after filing bankruptcy.

Make your new credit card payments on time and keep your credit balances low.

Make your payments on time every month and keep your balances low.  If possible, pay your balance in full to avoid getting into trouble.

Apply for new credit sparingly and take your time in rebuilding your credit.

Do not apply for too many credit cards at once as part of your credit score is based on how many credit applications you make.  Most important, take your time in rebuilding your credit score.  If you rush you may end up making a mistake that could delay your rebuilding process.

If you have any questions about rebuilding your credit after bankruptcy you should consult with an experienced Phoenix bankruptcy lawyer.  Our dedicated attorneys are available 24/7 to answer your Chapter 7 bankruptcy and Chapter 13 bankruptcy questions.