How Can I Rebuild My Credit Rating After Declaring Personal Bankruptcy?

Filing a bankruptcy gives you the chance to start over and repair your bad credit history. While you can expect your credit rating to plummet after a discharge, the low ratings are temporary. It's possible to raise your low credit score and rebuild your credit within a couple of years.

Instructions

1

Open a secured credit account with your bank. Contact your bank immediately after your discharge and take steps to obtain a secured credit card to begin rebuilding your credit. Secured credit cards are cards that require collateral in the form of an upfront deposit (between $300 to $500).

2

Continue to pay your auto loan. If you reaffirmed your auto loan, continue to make timely payment to your lender to help bolster your low credit rating. Late or missed payments can cause further damage.

3

Acquire a small loan. Obtaining and satisfying or paying off debts helps improve your credit after declaring a personal bankruptcy. Use personal collateral such as vehicle title to receive a small loan, and then pay off the loan completely within a relatively short time span.

4

Pay your bills on time. Get rid of bad habits and aim to pay your bills on time each month to avoid creditor harassment and further credit damage. Mail payments a day or two after receiving the statement to prevent late arrivals.

5

Carefully manage your debts. Avoid maxing out new credit cards or carrying high credit card balances. Debt to income ratio refers to the percentage of your monthly income that's used to pay monthly debts. Pay off debts each month to keep a low debt-to-income ratio.