Rebuilding Your Credit Score

You just filed Bankruptcy, which means your credit score just took approximately 150 point credit hit. So how do you bounce back?

It’s a double-edged sword of post-bankruptcy life: mismanaging credit may have gotten you into trouble (or just magnified other problems), but you have to get credit to rebuild your financial life.  

After your bankruptcy has been discharged, you need to re-establish good credit, right away for a Chapter 7 or after reorganization for a Chapter 13. The rule of thumb: there are no rules. How fast you build back your credit will depend on a lot of factors that vary widely.

It also depends on what resources you have. Obviously, if you have a high-dollar income, you have an edge. If you managed to hang onto your house, paying your mortgage on time will improve your credit report. (Many apartments don't report to credit bureaus, so those payments will keep a roof over your head but won't help rebuild your credit)

Ironically, people who file a Chapter 7 may have an easier time re-establishing credit.  While you’re in a Chapter 13 (reorganization) your options are somewhat limited in terms of credit.  When the discharge is complete you can start rebuilding your credit while someone who went through a Chapter 7 at the same time is already well on his way to repairing his credit.