It’s a widespread myth that filing bankruptcy will ruin your credit forever. Although bankruptcy does damage your credit, the damage is not permanent. Depending on what type of bankruptcy you file, a bankruptcy can stay on your credit for up to 10 years. But that does not mean you can’t take steps to build your credit immediately after the bankruptcy is completed.

Some steps on how to build your credit after bankruptcy:

  • Start a budget and stick with it – it’s important to start a budget by assessing the income you have coming in with the debt you pay each month. Paying bills on time, especially after bankruptcy, should be your top priority.
  • Make sure your credit report is accurate – You will want to check your credit reports regularly for discrepancies. Your credit report should show a zero balance for any accounts that have been discharged through bankruptcy. Its common for creditors to continue reporting negative account information even after your bankruptcy has discharged. It’s best to wait a few months after the bankruptcy completion for the credit bureaus to get updated on the discharge. But after that time, if they continue to report negative activity, you can send a dispute to the credit bureaus.
  • Make your non-bankruptcy payments on time – For the debt that was not discharged such as student loans and mortgages, you are to continue making the monthly payment.
  • Get new credit – securing new credit can be a challenge after the bankruptcy, but it’s one of the most important steps. One option is to open a secured credit card. A secured credit card requires you to put a security deposit down. But if you make small purchases and pay the full balance off each month, this can dramatically improve your credit score.

Recovering from bankruptcy is difficult, but it’s not impossible. If you have questions about bankruptcy, please contact our office at (206) 408-8158, or by email at: [email protected] for a free consultation.