It is well known that you can’t improve your credit score unless someone will give you credit, so you will need to get a credit card in order to achieve credit repair after bankruptcy. Fortunately, after you declare bankruptcy, many lenders will be eager and willing to give you a card. This occurs because the lenders already know you utilize credit and because they know that under the law you can’t declare bankruptcy for seven years.

As soon as your bankruptcy proceeding is complete and your debts discharged, you will likely begin receiving offers for new cards. However, most of these cards will be secured cards and/or sub-prime cards with very high interest rates, so you should choose wisely.


Getting Your First Card

Don’t just choose any secured card. You need to make sure you pick one that reports to the credit bureaus. This is the most important thing since the credit bureaus need to know that you are using the card wisely in order for your card use to raise your score.

You should also try to find a secured card that converts to a regular card after a set length of time (normally a year to two years). If you can’t find a card that does this, remember that you eventually will want to stop using the secure card and apply for a regular card once you have a period of positive credit history under your belt.

You also need to be aware that the secured card likely has fees and a high interest rate. Look for the card with the lowest fees possible. As far as the interest rate, while that can be important, your aim with this card should be to never ever carry a balance, so it shouldn’t matter as much if the interest rate is high.


What to Do To Raise Your Score

After you get a card, it is time to take the steps to actually rebuild your credit after bankruptcy. This means you should:

  • Use your card periodically for small purchases. MyFico recommends you keep the credit usage at 30 percent or less of the amount of credit you have available to get the highest marks for credit utilization.
  • Pay off your balance in full, on time (or early) every month. Carrying a balance is not necessary to improve your credit score and should not be done.
  • Check your credit report periodically to make sure the positive credit behavior you are exhibiting is being reported.
  • Make sure that all debts from your bankruptcy have been properly listed as discharged and that no further collection activity continues unless you filed a Chapter 13 bankruptcy, in which case you need to stay on your payment plan and make those payments in full and on time every month.
  • When your credit score gets high enough (generally above 650), consider applying for a regular non-secured card, with which you will continue to charge small amounts and pay off in full each month.

Credit repair after bankruptcy takes time and effort, but in the end, you will be glad you did it.

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