How to Rebuild Credit After Bankruptcy

There are two key factors in rebuilding your credit rating:
  • Make on-time payments and show responsible use of a secured credit card or loan.
  • Create new financial habits that will help you manage your money, such as:
  • Create a budget. When you were going through the bankruptcy process, you should have received credit counseling which hopefully included how to create a budget. Doing this helps you stay on top of your spending and get into good habits.
  • Create an emergency fund. Even if you can only put away a very small amount each month, it will add up over time.

Plan your post-bankruptcy credit strategy

Although bankruptcy will lower your credit score, keep in mind that other options – such as not filing bankruptcy and continuing to miss payments – will lower it also. In certain situations, bankruptcy may be the smartest move; in these cases, it’s important to plan a good post-bankruptcy credit strategy.

Your goals will be to change your spending habits and slowly but surely rebuild your credit score. To start, the first step is to look at the big picture of where your finances currently stand.
  1. Assess your current situation: Check your free credit reports. If you see any inaccurate information, dispute it and get it corrected. Your bankruptcy will remain on your credit report for 10 years and any late payments or debts that have gone to the collection will remain for 7 years.
  2. Look up your credit score: Credit scores are derived from your credit reports. Get in the habit of recording your credit score each month so you can see changes. Make sure to use the same score each month so you are comparing apples to apples.
  3. Determine a product to use to start to rebuild your credit: Because of your pre-bankruptcy history, you will be seen as a risky borrower to lenders. Changing this requires demonstrating that you now can reliably make payments and continue to do this over time. Remember, do not pursue these options until you have the funds to make payments! Products that will help risky borrowers establish a positive financial profile include:
  4. Secured loans and credit cards. These are backed by some form of collateral that the bank would be able to seize if you don’t make payments. Examples of collateral include homes, vehicles, cash, stocks, and insurance policies.
  5. Co-signed credit cards or loans. These require someone willing to co-sign for you and assume your debt if you stop paying.

Remember, these only rebuild your credit if you make regular, on-time payments –
missing payments will damage your credit score!


As always, keep in mind that everyone’s situation is different. Bankruptcy is a serious step; it’s critical to consult with an expert to be sure you choose the option that is best for your specific financial and life situation. The knowledgeable and professional team at Amanda Todd Daniels will draft a plan, negotiate with your creditors, and handle the legal process so that you can focus on other areas in your life. Read more about the bankruptcy services Amanda Daniels offers here.

During your first free consultation with Amanda Daniels, she will go over your financial situation in detail in order to determine if filing bankruptcy is a viable option for you. Contact her today at (662) 678-8009 to request a consultation.


Hear from a few people we have worked with...

“Amanda Todd Daniels fights like a Navy seal!  She saved our family from great peril. I highly recommend her craftsmanship and command of the Law.  If you need legal protection, look no further.  You will find it with her as council.” ~ Michael Atherton

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