Improving Credit after Bankruptcy – 4 Tips to Help


If your credit has taken a hit after declaring for bankruptcy, this negative mark can stay on your credit report for almost 10 years, and it could be the dent that prevents you from moving forward financially and investing in ventures that can make your life better.

But, the good news is that you can rebuild your credit after bankruptcy, although it will require plenty of hard work from your end and a lot of responsible spending. With each step you take your goal should be to get a positive mark on your report.


The positive marks will slowly start to help your credit score to rise. You will find yourself starting to become eligible for loans, new credit cards, and even mortgages that have better rates and terms. Read on to learn more about these tips.

Improving Credit after Bankruptcy - 4 Tips to Help
Image Source: Consumer Financial Protection Bureau

Keep Up to Date with Payments

After filing for bankruptcy, you should determine which accounts are not closed yet. What bankruptcy does is cancel your debts, although there is usually some debt that remains such as your alimony payments and student loans.

Repairing your credit after bankruptcy will involve you paying down these balances. This will be able to lower your debt-to-income ratio that will then boost your credit. In order to speed up the process, spend time paying a little more than the minimum monthly requirement.


Avoid Job-Hopping

This doesn’t directly affect your score, but it has the ability to influence your lenders. They will want to know whether you have a reliable income or not, and whether or not you will be able to repay their loans.

While reviewing your applications for car loans, or credit, the lender will consider our job history and income levels over the past 24 months. 

Your credit score and other factors will also be considered. Having a stable job and income will work in your favor and boost the lender’s confidence in your ability to repay the loan even after bankruptcy.

Apply for New Credit

It is much harder to get new credit after declaring chapter 13 or 7 bankruptcy. The interest rates and fees will be much higher and it could even be very hard to get approved for credit.

The most important thing after bankruptcy is to get new credit, which will show that you are a responsible lender. Building a positive history of having on-time payments will also give your credit score a positive history that will start boosting you in the right direction.

With the new credit, just make sure that the company reports to the three major credit bureaus – TransUnion, Experian, and Equifax – that you are making the regular payments.

Here are a few ways you can get new credit after bankruptcy: applying for a secured credit card, getting a credit builder loan, getting retail and gas cards, and opening a small loan. 

Consider Using a Cosigner

Improving Credit after Bankruptcy - 4 Tips to Help
Image Source: Medium

Having a cosigner on a loan or a rental agreement will help your chances of getting approval after bankruptcy. The cosigner will act as your legal financial backer just in case you are unable to make the payments on time.

Mortgages, Auto Loans, and rental agreements will often use cosigners. With a cosigner, you will be approved for credit under your own name. With successful payments, your creditworthiness will be boosted and your credit score will also improve.

Becoming an authorized user on someone else’s credit card will give you some boost on your credit report, so long as the person makes up to date payments on their card. You could check to see if one of your family members or friends is willing to add you to their credit card accounts.

When the payments show up on the credit report, then they will go a long way towards making your history better than it was before.


This information gives hope to anyone who may have declared bankruptcy due to one reason or the other. You can get back on track if you follow the above tips on how to repair your credit.