Improving Your Credit Score After Bankruptcy

Sometimes people avoid filing bankruptcy because they worry about how their credit score and future interest rates will suffer. Many people who file have always been responsible with credit and have paid bills on time and are then discouraged to think about their future credit prospects. While it’s true that a bankruptcy will show on your credit report for many years, your score can actually improve quite quickly, if you strategically use new credit and monitor your report. Many people even end up with the highest credit score they’ve ever had.

Your Credit Report

Filing bankruptcy will discharge most of your debts, putting an end to missed or late payments that will show on your credit report and lower your score. As soon as your case is finalized, you’ll be given your “Discharge of Debtor” documents, which show your debts have been discharged. You can then request credit reports from all three of the credit reporting agencies, which are Equifax, Trans Union, and Experian. Closely examine all three of the reports to make sure the information is accurate, including your address and contact information. Each debt that was included in your bankruptcy should show a zero balance owed and also indicate “discharged in bankruptcy” or “included in bankruptcy.” Sometimes debts that are not yours will be listed on your report because of a clerical error or misspelled name. If this does happen, dispute the debt to have it removed as soon as possible. You can also request that old debts are removed from your report. Most types of accounts can be removed after seven years of inactivity.


Once you’re sure your credit report is clean, the work of rebuilding and re-establishing your credit begins. Don’t be afraid to get a new credit card; this is the best way to begin improving your credit. You may need to start with a secured account, and the interest rate will be high, but by faithfully paying off your balance completely and on time each month, your credit score will rapidly improve. Be sure to make all your payments on time, and if you do begin to fall behind, keep in close communication with creditors to avoid collections, if possible.

In addition to timely payments and wise use of credit, creditors also look at the stability of your life when making lending decisions. If you can show that you’ve lived in the same place and held the same job for a significant time, you may qualify for better credit options than someone who has moved around and changed jobs. Sometimes these changes are unavoidable, so just be prepared to explain your circumstances to creditors or potential landlords.

Moving Forward

While it can feel difficult starting over with a low credit score, bringing your score back up is possible with some planning and discipline. The first step to a more successful financial future might be choosing bankruptcy to get a fresh start. If you’re wondering if bankruptcy is right for you, give me a call so we can explore your options.