How to Build Your Credit After Bankruptcy

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Going through bankruptcy is a very emotional process. There is a sense of relief that your prior debt burden is gone and you can start your life over. There is also a sense of frustration because your credit score is non-existent and you do not know how you will ever establish credit again in the future.

The good news is that over time, usually about 18-24 months, you can begin to reestablish credit with many of the major lenders. You can even buy a house after your bankruptcy has been finalized for two years. The best thing that you can do during this ìwaitingî period is build your credit up so when you are ready to reestablish credit, you can do so with ease. Below are some tips on how to build up your credit yourself, but it’s also good to consult with professional bankruptcy attorneys in order to get a better idea of the bankruptcy process.

Tricks To Rebuilding Your Credit After Bankruptcy

1. Start A Savings Account. There are several reasons that you need to start a savings account right away after filing bankruptcy. First, you need to teach yourself to start saving for a rainy day. This type of habit is very good to get into so that you always have something to fall back on during hard times. The second reason to do this is to build a bank history. You may not be able to get a checking account right away, but you can get a savings account. This will establish you with the bank for future use. The final reason to start a savings account is for down payments. After a bankruptcy you may need to put larger-than-normal deposits don on a house or car. Having a savings account will allow you to meet this demand.

2. Pay Everything On Time And Request Reporting To The Credit Bureaus If Possible. If you have any bills left, such as your rent, after the bankruptcy, pay it on time each and every month and ask that the landlord report your payment history to the credit bureaus. This will help to improve your credit score by showing on-time payments for a debt.

3. Start Small And Do Not Apply For Credit Often. When you do apply for credit, start with very small amounts and do not apply for credit too often. Any time you apply for credit more than three times within a 30 day period your credit score will be negatively impacted. The only time that this does not apply is for mortgage applications.

4. Get A Secured Credit Card. Once you have been out of bankruptcy for at least 18 months, approach your bank where you have a savings account about a secured credit card. Most banks offer this to their clients if asked to help rebuild credit. These credit cards act just like a real credit card because the banks will report your payment history to the credit bureaus. Additionally, most banks will convert the card automatically to a non-deposit card after two years of on-time payments. It is always in your best interest to approach a bank for this type of card instead of private lenders because their interest rates and fees will be more to your benefit.

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You can recover from a bankruptcy and rebuild your credit, it just takes time. With a little effort and some patience, you can overcome the hardships of bankruptcy.