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How do you repair your credit after a bankruptcy?

On Behalf of | Dec 4, 2014 | Credit Card Debt

After receiving a bankruptcy discharge, you may be feeling lost and wondering what to do next. Will you ever be able to repair your credit? Should you apply for new loans, or is that a bad idea? Fortunately, there are many options for Oregon residents after a Chapter 7 or Chapter 13 bankruptcy that can help them restore their credit. Because personal bankruptcies don’t carry the same financial and social stigma they used to in years past, recovering from a bankruptcy is often easier than you might think.

It’s true that for about a decade after receiving your bankruptcy discharge, your credit score will be negatively impacted, states Bankrate. You may have initial difficulty obtaining a home or car loan or being approved for credit cards. However, you can start rebuilding your credit almost immediately after receiving your discharge. The following are some steps you can take to re-establish your credit and improve your financial self-esteem:

  • Start putting aside a small portion of your paycheck into a savings account for emergencies.
  • Pay all your bills on time, which will reflect positively on your credit report.
  • Cut back on unnecessary spending, such as entertainment or eating out.
  • Consider applying for a secured credit card, which is usually easier to obtain after a bankruptcy than an unsecured card.
  • Watch your credit score carefully.

It is important to remember that for a while after your bankruptcy, you can expect to have high interest rates on credit cards and other loans. However, if you only make small charges on a card and pay off the balance immediately, these interest rates won’t have a huge impact. You should also watch for hidden fees, which some unscrupulous lenders can spring on unsuspecting people recovering from bankruptcy.

The good news is that if you are careful with your spending and rebuild your credit wisely, within a couple of years you may be eligible for lower interest rates and other positive credit options, including a home loan.


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The Law Office of Kim Covington is a debt relief agency, and I have helped families, individuals and small businesses, file for bankruptcy relief under the U.S. Bankruptcy Code, for over 22 years.