Rebuilding Credit After Bankruptcy - How Long Will Chapter 7 and 13 Stay on Your Report? Skip to main content

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Rebuilding Credit After Bankruptcy - How Long Will Chapter 7 and 13 Stay on Your Report?



You can rebuild your credit score after bankruptcy

Image Source: Flickr User Jewish Women's Archive

Many consumers believe that filing for bankruptcy will permanently ruin their credit – or at least wreck it for a decade or more. Neither of these is true. There is a straightforward process to rebuilding credit after bankruptcy that most filers can accomplish so long as they are committed and diligent.

Here are some of the answers about how to get the ball rolling to improve your credit after bankruptcy.

How Long Does Bankruptcy Stay on Your Credit Report?

Chapter 7 will stay on your credit report for 10 years and Chapter 13 for seven years. However, the accounts included in the bankruptcy should still age out and fall off seven years from the date they fell delinquent.

How Long Does Bankruptcy Affect Your Credit Score?

This is the more important question – not how long the bankruptcy lingers on your report, but how long it makes a difference. The longer the time elapsed after filing, the less impact it will have. Plus, the greater your efforts to re-establish your credit, the less impact it will have overall.

What Is the First Step to Rebuilding Credit after Bankruptcy?

You should start rebuilding credit by ensuring there’s a firm foundation to build on – and that starts with an accurate credit report. A few months after your bankruptcy filing, you should pull your report and make sure all accounts are showing properly and there are no errors on the report. Fix any mistakes.

What’s Next after Cleaning up Your Credit Report?

The next step is credit cards – likely you’ll have to start with secured cards, then move on to unsecured. But before you go applying for every card under the sun, you need to do your homework. Get your latest credit score from each of the three agencies, then do some research on card issuer criteria for approval.

How Do You Know Which Credit Cards to Apply for?

Look for cards that will accept a bankruptcy on your credit report, that will accept your current credit score, don’t have exorbitant fees (some will charge a set-up fee, card fee, and annual fee), and that are issued by reputable creditors.

How Often and How Many Cards Should You Apply for?

Credit inquiries will stay on your credit report for a couple of years but do less damage the longer it is from the inquiry date. Applying for a few cards at the same time, when you think you can get them, may do less damage than applying for one card a month over a longer period.

How Should You Use Credit Cards Once You Get Them?

The key is to use the card enough to trigger a positive payment and usage history that will encourage the creditor to increase your credit line – without getting yourself into debt. Many consumers are gun shy about cards after bankruptcy and understandably so, but to rebuild your credit it is important to actually use your card.

Don’t Carry a Balance and Pay Early and Often

For many, the best approach is to use the cards for items they must purchase anyway, such as groceries, fuel, or even utility bills. Your credit cards should not be used for extravagances you can’t afford to pay cash for. If you pay the card balance off before your statement, there’s usually no interest.

You Can Rebuild Your Credit after Bankruptcy

It will take time, effort and patience to rebuild your credit after bankruptcy but it can be done – and it’s something you should do. After all, the whole point of bankruptcy is to get a fresh start – and that necessitates improving your credit score. Check out CreditScoreKeys for more information.

If you are deep in debt and looking for a brighter financial future, contact the Law Offices of John T. Orcutt for a free North Carolina bankruptcy consultation. Call +1-919-646-2654 now for a free bankruptcy evaluation at one of our convenient locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington .

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