Bankruptcy will show up on your credit report for 7-10 years, depending on which chapter you file. If you file for Chapter 7, it will fall off your credit report at 10 years. If you file for Chapter 13, it will disappear from your credit report after 7 years.
Even though that may seem like a lot of time, your credit score will not be poor for the length of time that the bankruptcy is on your report. You can start rebuilding your credit immediately after filing for bankruptcy! You may even raise it back up to a good credit score within 4 or so years.
How to Rebuild Credit after Bankruptcy
Don’t get caught up thinking that your bankruptcy status leaves you with bad credit for the length of the 7-10 years. You can start rebuilding your credit today:
1. Secured Credit Card: It may seem counterintuitive to sign up for a new credit card after bankruptcy. But you can choose a secured credit card, where you put down the money to show you’re good for it. And then pay off the credit line each month. These punctual payments will show up on your credit report and consequently increase your credit.
2. Pay Off Credit Cards Each Month: It is a myth to think that you should only work with cash after bankruptcy. Use a credit card, but pay it off each month or keep the balance under 30%.
3. Make Rent and Car Payments On Time: For any debts that you do have, pay them on time every month. Never make a late payment or default on a bill. For every payment you pay on time, you are putting good marks toward your credit score.
When you show a history of good credit behavior, then your credit score will increase. You can’t do this if you never use credit. Learn the healthy spending habits that will rebuild your credit after bankruptcy.
If you have bankruptcy questions, contact Miles & Hatcher, LLP. Our team can help you decide whether bankruptcy is right for you or help you rebuild if you have already filed for bankruptcy. Give us a call today: (909) 481-4080.