Can I Rebuild My Credit After Bankruptcy?

Are you tired of constantly receiving phone calls and letters from creditors? Is your debt growing instead of shrinking every month and making it more difficult to keep up with paying your bills?

You might benefit from filing for bankruptcy. A trusted bankruptcy attorney will help you decide whether filing for Chapter 7 or Chapter 13 bankruptcy would be a better option.

But before taking that step, ensure you know the answers to questions like, “Can I rebuild my credit after bankruptcy?” This will help you determine whether filing for bankruptcy is the right choice.

You’ll be happy to hear you can rebuild your credit after bankruptcy. It just might take time to do it.

See how to begin rebuilding your credit after filing for bankruptcy below.

Checking Credit Reports

Soon after you file for bankruptcy, your credit score will take a tumble. You might see your credit score drop by 200 points or more simply because you filed for bankruptcy.

You’re eligible to receive free copies of your credit reports from the three major credit bureaus (Equifax, Experian, and TransUnion), so take advantage of it. Visit AnnualCreditReport.com to procure your credit reports and comb through them for errors.

According to a 2024 Consumer Reports study, over one-fourth of Americans have errors on their credit reports and don’t even realize it. Disputing errors in your credit reports could boost your credit score almost instantly. Be sure to dispute any errors you find when you’re wondering, “Can I rebuild my credit after bankruptcy?”

Making Debt Payments

You will typically have the majority of your consumer debt discharged after filing for bankruptcy. There are, however, certain debts that can’t be discharged, such as tax debt, student loan debt, and any other debt not included in a bankruptcy filing.

If you’re left with debt after you file for bankruptcy, keep up with your outstanding payments. Otherwise, you might start to see your credit score going down even further rather than going back up.

In the coming months and years, you will showcase your financial responsibility by putting together a better payment history. This will work wonders for your credit score and improve it soon.

Securing Credit Cards

You might struggle to convince credit card companies to provide you with credit cards immediately after filing for bankruptcy. They’ll likely view you as a high-risk borrower and might not approve you for cards.

But over time, you may qualify for secured credit cards. Credit card companies will often approve you for them as long as you agree to back them with cash deposits.

Once you qualify for these cards, use them responsibly and pay them off as soon as possible to prevent your credit utilization rate from climbing too high. This will begin to show creditors that you can be trusted again.

Another option when you’re left to wonder, “Can I rebuild my credit after bankruptcy?” is to ask someone you trust to add you as an authorized user on their credit card. This is also an effective way to improve your credit utilization rate and rebuild your credit.

Using Credit-Builder Loans

Just like you’ll struggle to secure credit cards after filing for bankruptcy, you’ll also have a tough time being approved for loans. But credit-builder loans are different. They’re specifically designed to help people like you rebuild credit.

So, how do credit-builder loans work? Here’s a brief breakdown:

1. A lender agrees to give you a credit-builder loan.
2. They set aside the money they’ve agreed to lend you in a savings account.
3. You begin making monthly payments on a loan.
4. You receive the loan once it’s all paid off, minus any interest and fees.
5. You see your payment history improve on your credit report — and your credit score start to go up.

Embracing Credit Counseling

Coming up with answers to the question, “Can I rebuild my credit after bankruptcy?” is confusing for some people. If you’re feeling overwhelmed, call a credit counseling company for help.

This company can:

• Check your credit reports and dispute errors for you
• Show you how to create — and stick to! — a monthly budget
• Provide you with more specific guidance on rebuilding your credit

Contact Us To Learn More About Filing for Bankruptcy

Now that you know how to answer the question, “Can I rebuild my credit after bankruptcy?” you may be ready to file for bankruptcy. Biggs Law Firm is here to assist you in filing for Chapter 7 or Chapter 13 bankruptcy. Call us at 919-375-8040 for more details.