Chapter 7 is the most serious credit transgression, so restoring credit after bankruptcy is not an instantaneous process. Don't believe the claims of companies that guarantee rapid credit repair because this simply isn't possible. In an article for MSN Money on November 11, 2009 called "5 ways to kill your credit score", Liz Pulliam-Weston stated that someone with a score of 680 should expect an 130 to 150 point drop. Chapter 7 is also recorded by Experian, Equifax and TransUnion for the next 10 years.
Don't despair because your score isn't set in stone. If it was, there'd be no incentive to manage your finances better in the future. One of the more obvious bankruptcy facts is  the longer the period of time that has elapsed since you filed for chapter 7, the more likely you are to qualify for credit cards, loans and mortgages. You also need to work on rebuilding credit, which means correcting mistakes in your credit report and paying your debts punctually in the future.

Restoring Credit After Bankruptcy By Correcting Credit Report Errors

After you've been discharged from chapter 7, you need to order a copy of your credit report and check it for errors. Under the Fair and Accurate Credit Transactions Act, you are legally entitled to a totally free copy of your credit report once a year. Order your copy online, and scrutinize it for mistakes. For example, debts that were included in your bankruptcy agreement that continue to show as active. Unless corrected, your score won't get any better.

Provided that you query the mistake and support it with a copy of the appropriate supporting documentation, each agency is legally obligated to correct the issue within 30 days. If you're not sure how you should go about rebuilding credit, consider utilizing the services of a credit repair attorney. They do make a charge, but have a far more professional approach and are more likely to achieve faster results than the layman.

Getting Credit After Bankruptcy

In order to expedite the credit repair process, you'll need to make repayments towards a form of both revolving credit and instalment debt. If you have reaffirmed your auto loan or mortgage agreement, that should suffice. If not, consider getting a small loan from a credit union over 12 months. Provided that you make the repayments punctually, this will help with raising credit scores. Make sure that you don't borrow more than you can easily afford to repay.

You'll also need to make repayments towards a form of revolving debt, such as a credit or store card. Although you can borrow money on an unsecured basis, it's advisable to sign-up for a secured credit card. This involves placing a cash deposit in the lender's holding account in return for a matching spending limit. When restoring credit after bankruptcy, never spend more than 30% of your limit in a single month.


Pulliam-Weston, Liz. (November 11, 2009). "5 ways to kill your credit score" MSN Money.