Repairing Your Credit After Bankruptcy

If you have recently filed for bankruptcy, you may be living in fear that your credit is permanently and irreparably ruined. You should know, however, that no matter what type of bankruptcy you may have filed, it is still possible to rebuild your credit and even to make it better than ever before. Credit is very fluid and, just as it can be destroyed with a few wrong moves, it can also be repaired with consistent good choices and a conscious effort to change your spending and repayment habits.

The type of bankruptcy you have filed will play a large part in the changes you can expect to see in your credit report. Chapter 13 bankruptcy will generally be far less damaging than Chapter 7 bankruptcy. First of all, a Chapter 13 filing only stays on your credit report for seven years, whereas a Chapter 7 will remain for ten. Additionally, you will have created a plan to pay off your bills in a timely manner and each time you successfully complete a step of the plan or pay off an outstanding debt, your credit will be “rewarded” for it. Providing that you meet all the demands of your Chapter 13 plan, you are likely to experience an actual boost, rather than a decline, in your credit rating. Either way, having a bankruptcy on your record is far less damaging than having several outstanding debts.

This does not mean that your situation is hopeless if you have chosen to file for Chapter 7 bankruptcy. Though it will remain on your credit for a longer period of time, you must remember that it has enabled you to become debt free or, at the very least, closer to being debt free. At first, it may be challenging to secure any types of credit such as bank accounts, housing, car loans, and credit cards, but if you are willing to start small and work with smaller companies or specialty companies whose main business is helping those who have filed for bankruptcy or who have generally poor credit, your score will slowly start to go up. Making these few changes will enable you to get a better credit score in the future which will allow you to have and do things that you have always wanted.

Bankruptcy, should not be regarded as an entirely negative experience. Though it can be a difficult and somewhat scary process, you can come out the other side stronger and with a better financial future ahead of you. If possible, speak with a financial advisor or other expert about the ways in which you can better your credit score and about your options for getting credit after having filed for bankruptcy. Providing you do things correctly, you should end up happy with the effects of the bankruptcy filing in the long run.

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