Defeat Bankruptcy

Rebuilding Credit After Chapter 7 Bankruptcy

Chapter 7 bankruptcy weighs in on your credit very heavily, and it will stay on record for at least 7 years. During this time, you may find it especially hard to get approved for any type of credit, at least without it being secured by some type of real property first. Generally, two years after your Chapter 7 bankruptcy has been discharged, you should be able to start obtaining credit again. However, you must be very careful to avoid “credit traps” that specifically target people who have a hard time getting credit.

You want to avoid extremely high rates of interest on credit cards, and you should be wary of excess fees. Sometimes, you may be required to secure the debt you are borrowing, but one could expect such after going through a Chapter 7 bankruptcy. One thing that you want to be sure to do is to apply for credit from different sources. It doesn’t do much good for rebuilding your credit after a Chapter 7 bankruptcy to have just credit cards or personal loans. A mix of different credit types is always best.

The key to rebuilding your credit after Chapter 7 bankruptcy is to be smart about it this time. Don’t take on more debt than you can handle. A rule of thumb for rebuilding your credit is to only borrow what you have the cash on hand to repay. Start small with a credit card or personal loan, and as you add good history to your credit report, expand to bigger lines of credit.