Banking Category Banking: the easy, simple banking guide

How to quickly rebuild my credit after bankruptcy

Bankruptcy can hit your credit score by as much as a 100 point deduction, but your score does not have to stay that low while the bankruptcy remains on your credit history.

There are many ways to regain points on your credit score even after bankruptcy -- it just takes effort and patience. You can begin improving your credit the day after your bankruptcy is discharged.

Check your credit reports. Your credit report and history directly influence your overall credit score, but the credit reporting agencies don't always get it right. While the bankruptcy has lowered your score, there may be inaccurate or expired negative information that you can have removed, which will increase your score. You can dispute your credit report from each of the credit agency's websites.

Apply for a credit card. Most if not all of your credit cards were likely included on the bankruptcy, but you may still qualify for an unsecured or secured credit card. The interest rates will likely be high and their spending limits will probably be low, but with a credit card you can begin building your credit again straight away. Only get one or two cards. You don't want to overload yourself with too many credit cards with high interest.

Keep your balance low. Your credit score takes into account the amount of debt you have and the amount of credit you have available to you. Try and keep your total debt at about 10 per cent of your total credit availability. You should also pay it off every month and start fresh the following month. This may take several months before it begins affecting your credit score positively.

Pay your bills on time. Perhaps the easiest and best way to raise your credit score quickly is to pay your bills on time. Find out when your credit card, mortgage and personal loan payment dates are and plan to have your payments in on time or even early. Your credit report will show that you are making payments on time and this will improve your credit greatly over a period of time. This may also take a couple of months before you notice a change in your credit score.

Find instalment credit. Credit cards are considered revolving credit because you only pay interest on what you borrow. Long-term credit such as car loans and a mortgage are considered instalment credit and weigh heavier on your credit score. If you already have a mortgage or car loan that survived your bankruptcy, pay bills on time and with the pre-determined amount. If you don't have one, then you might consider looking for an instalment loan to improve your credit quickly.


Try to secure big name department store credit cards and pay them off every month without carrying a balance. Just place a few small purchases on their credit cards and pay it off. This will also help re-establish your credit.