Improving Credit After Bankruptcy – Tips and Tricks

Bankruptcy is a complex legal process that can affect your reputation seriously and adversely. On the bright side, It won’t last forever, no matter how much damage is done to your credit.

Bankruptcy remains on your credit report for seven to 10 years, but its effect diminishes as time goes by. Meanwhile, by taking some constructive steps, you can start improving credit right away.


Each positive mark on your report starts to increase your credit score. With better rates and conditions, you will be eligible for new loans, credits, and mortgages. This article shares five tips and tricks for building credit after bankruptcy.

Improving Credit After Bankruptcy - Tips and Tricks

Make Timely Payments

Rather than rushing to get funds right away, concentrate on making prompt payments every month on current loans or credit cards to rebuild your credit. Payment history accounts for 35% of your FICO score.

One of the easiest ways to improve your credit is with on-time payments. New loans and credit card applications can also cause hard inquiries on your credit report, further decreasing your score.


Every credit inquiry or rejection on your credit report will negatively affect your credit score, making it much more challenging to restore your credit after a bankruptcy. Focus on making prompt payments to your existing accounts before applying for new funds to raise your credit score.

Build An Emergency Fund

Because all of your debt will likely decrease following a bankruptcy, it’s the right time to start building up your savings. You eliminate the need to apply for loans by putting a part of your income in a savings account or cost-cutting on non-essential subscription or membership services.

Loan applications could take you back into debt if you can’t keep up with the high-interest rates on bad credit. Without an emergency fund, it can be easy to fall into the same debt perils which induced bankruptcy in the first place.


After removing your debt payments as part of the bankruptcy process, create a budget based on your earnings and remaining expenses. Your new budget must include building an emergency fund.

Improving Credit After Bankruptcy - Tips and Tricks

Monitor Your Credit Report

Review your reports regularly for any errors or incorrect data. If you find any inaccuracies, such as a delinquent account that does not belong to you, report it to the appropriate credit reporting agency.

Your credit score is likely to rise when the net negative effect is removed. A low credit score can be caused by inaccurate information on your credit reports. Numerous credit card companies deliver constant updates to monitor your credit score.

Keep Up On Payments With Non-Bankruptcy Accounts

It’s important to know which accounts weren’t closed after you filed for bankruptcy. Bankruptcy closes much of your debt, but there is usually some debt leftover, including student loans or alimony payments.

Fix your post-bankruptcy credit by paying those balances down. This reduces your debt-to-income ratio and should improve your credit.

To accelerate progress, when possible, pay more than your minimum monthly payment. Making payments on time is essential to establishing good credit.

Improving Credit After Bankruptcy - Tips and Tricks

Avoid Job Hopping

Job hopping doesn’t affect your credit score explicitly but can impact lenders. They would like to know that you have a secure income and can pay back the debt.

A lender will consider your income, job background in the past 24 months, your credit score, and other factors when reviewing your application for new credit or a loan.

Having a stable job works for you, strengthening the trust the lender has in your capability to pay back your loan even after bankruptcy.

Bottom Line

There’s no smart trick that can makes your credit score bounce back overnight after you file for bankruptcy. Building great credit takes time, but you can speed things up by understanding what goes into your credit reports and scores and following these credit building tips.