Rebuilding Credit after Bankruptcy

Many people want to know how long they have to wait before re-applying for credit after bankruptcy.  While one can apply for credit as soon as their bankruptcy has been discharged, most creditors will not approve applicants with a recent bankruptcy on their credit report for a line of credit.  Some even include clauses in their applications that advise applicants that by signing they are asserting that they have not filed for nor had a bankruptcy discharged within a certain amount of months.

Ways to Rebuild Credit

Many years ago, the only thing one could really do after bankruptcy was literally wait it out.  As the bankruptcy aged, one’s credit score inched up; assuming new, unpaid debt was not incurred during this time.  Waiting is still an option that some choose.  It requires patience and can take a considerable amount of time, but it prevents those who have filed from bankruptcy from finding themselves in dire financial straits again.

However, for those who hope to begin rebuilding immediately, a niche lending market has sprung up to provide credit those who would not qualify for credit, otherwise.  These companies typically supply low limit or secured credit at high interest rates to consumers who want to begin rebuilding their credit.  The beginning limits of these types of unsecured credit cards are typically not more than a few hundred dollars.  Secured cards operate somewhat like debit cards.  One places money into an account and the credit limit corresponds directly to the balance of the account.  It’s sometimes possible to reaffirm credit card debt that is in good standing and rebuild based from there.