How to Rebuild Your Credit After Bankruptcy (BK)
You've just filed bankruptcy and are nervous about what your credit future holds. Fortunately, it is relatively simple to get a decent credit score a short while after filing BK. This article will show you how.
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Instructions
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After filing BK but before discharge, apply for at least one secured or unsecured credit card (if you can get one). HSBC and Orchard Bank both have preselectors on their site that allow you to see what you can be approved for without them pulling your credit. Some other sites that offer this benefit are Capital One, Bank of America (not likely you will be approved), and American Express (also not likely).
If you can't get an unsecured credit card, Orchard also offers a secured card that would be a good start for rebuilding your credit history. It is important to remember not to use these cards before you are discharged, as you may jeopardize your dischargeability (not likely, but the benefit here does not outweigh the risk).
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After you discharge, get a copy of your credit report. Go through every entry with a fine toothed comb. Make sure that each and every tradeline that was included in your bankruptcy and discharged is reflecting a zero balance and not continuing to reflect late payments or chargeoffs. It is less important to try to remove the accurate accounts and more important to just make sure that every is reporting correctly.
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After you have successfully cleaned up any inaccuracies on your file, apply for another credit card and if you need (or want) an automobile, now may be a good time to get one. This will begin to diversify your credit profile. So, you will have 3 tradelines on your credit report.
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Use the credit cards, but do not pay in full (this is very important to building). Carry at least a small balance over each month, but be sure to make each payment on time. After about 3 more months of paying these on time, you should be ready to apply for another credit card. Keep the pre-selector sites in mind, that way you don't burn any unnecessary inquiries when you will most likely get shut down.
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About a year after filing, you should be able to enjoy a pretty healthy credit rating. Granted, you will not be the absolute best credit risk, but you will certainly be more attractive to lenders than you most likely were before filing BK.
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Tips & Warnings
Work on accuracy of tradelines. Don't worry about clearing negatives at this stage. You have just been through one of the biggest credit blows possible, and those 30 day lates don't nearly compare in weight. They mean less now that you have filed BK and discharged the debt.
Don't dispute any tradeline on your reports as "Not Mine" unless it is really not yours. This can open up a huge can of worms that you don't need to deal with at this crucial time of credit rebuilding.
Don't send ANY of your bankrupcty papers to the credit reporting agencies. If you do, they will have all of your info in their databases forever and that could make disputes that much harder.
