Contrary to popular belief, filing bankruptcy does not mean that a person will never have decent, or even good credit again. As a matter of fact, if handled properly, one may even end up with the highest credit score they have ever had in the following years. Though a credit rebuild takes time, it is possible to get back on track.
First, understand that a Chapter 7 filing itself, also known as total bankruptcy, will remain on a credit report for seven to 10 years from the date of discharge. This is a fact that you should not waste time disputing. It is part of your credit history, and it is there. Instead, focus on the debts listed on your report that were included in the bankruptcy discharge. Each account should show a zero balance as well as a note that states the debt was discharged in bankruptcy. If it is reported any other way, it is the debtor’s responsibility to dispute it directly with the credit bureau. This is an important step because a continued negative report can severely impact a credit score.
Second, be sure to pay all non-bankruptcy accounts on time after receiving a discharge. For example, often in Chapter 7 debtors will choose to reaffirm on debts such as a mortgage or car loan. This means they request to retain possession of that property and continue making the required payments. It is of utmost importance that these payments be made on time. If they fall behind, a creditor may be more inclined to quickly repossess or foreclose because they know you cannot file Chapter 7 bankruptcy again for at least 7 years. Therefore, you cannot get out of owing the debt. Further, this could prove disastrous to a credit score.
Last, after some time has passed and creditors are willing to give you another chance, go low and slow. Do not attempt to attain multiple accounts at one time that you likely would not be able to keep up with. Instead, consider opening one secured credit card account and making payments on time every month for at least one year. This is the best way to re-establish credit worthiness and increase your score on a steady incline.