How To Rebuild Your Credit After Bankruptcy

How To Rebuild Your Credit After Bankruptcy

When you go bankrupt, your credit will suffer severe damage, and it'll take a lot of hard work to recover from it. In this article, we’ll tell you how to rebuild your credit after a bankruptcy.


1. Dispute Accounts Included in the Bankruptcy 

Accounts included in the bankruptcy can remain on your credit profile for up to 7 years. You can dispute any of those accounts. If the creditor can't verify that information within a 30-day period, the credit bureau must remove the disputed account from your report by law. 


2. Check Your Credit Report and Scores for Any Changes

You can use several different websites to check your credit report and scores. These websites are completely free and using them to check your credit won't have any negative effect on it. Use these websites not only to monitor your credit score but also to track all unusual changes on your report. This will protect you against potential frauds.


3. Get a Secured Credit Card 

To rebuild your credit after a bankruptcy, you'll need to add some positive history to it. Start with a secured credit card. It works just like a traditional credit card, but to get approved, you'll need a deposit equal to the amount of your credit limit. You'll get your deposit back once you close your account, or when you upgrade to an unsecured account (most likely after 6-12 months). 


4. Get a Credit Builder Loan

A credit builder loan is a type of secured short-term loan you can get from your local bank or credit union. To get this loan, you'll also need a deposit equal to the amount of the loan. This deposit will be held into the account until the loan is paid off (usually after 12-18 months). 


5. Find a Co-Signer or Co-Borrower

The only way to get any type of unsecured loan after a bankruptcy is to find a co-signer or co-borrower who'll be financially responsible if you stop paying your monthly obligations. You can also improve your score if someone with good credit adds you as a co-signer.


6. Become an Authorized User 

If one of your friends or family members has an account in good standing, you should ask them to add you. They don't need to give you access to their account, and you don't need to get a card. All they have to do is add you as an authorized user so that the history of their account appears on your credit report.


Getting a Mortgage Loan After a Bankruptcy 

You can qualify for a mortgage loan just a couple of years after a bankruptcy. You should check waiting periods for different types of mortgage loans - you might be able to apply sooner than you think.