Sometimes a debtor chooses to declare bankruptcy after their repayment obligations become too much of a burden. Although there are some benefits to filing for bankruptcy, it is a difficult decision to make because there are also many drawbacks. Aside from the expenses and potential loss of assets, there are many other things to consider, including a negative impact on the debtor’s credit. After going through bankruptcy, focusing on repairing credit should be the goal. There are many actionable steps one can take to improve your credit and raise your score after bankruptcy.

Monitor Your Credit Report

Routinely checking your report will enable you to spot errors or issues. AnnualCreditReport.com allows you to receive at least one free credit report from each of the three major credit bureaus per year, though during times of economic uncertainty, you may be able to receive free reports more frequently. Checking your credit reports will allow you to ensure that they are accurate. If you happen to find inaccurate negative information, you can dispute credit report errors.

Continue Making On-Time Payments

When you have accounts not included in bankruptcy, you should continue to make on-time payments. At the very least, make minimum payments, but if you can pay extra, it will lower your credit usage, which can also help your credit. In addition, making on-time payments will help reestablish your credit and show that you are becoming more financially responsible. Payment history makes up a significant portion of your credit score, so this is a big step for improving your overall credit history and raising your credit score. If you forget to make payments on time, set a reminder on your phone, by email, or in a planner. Many lenders and banks allow you to set up autopay.

Rebuild Your Finances

One way to ensure you don’t do any more damage to your credit and to prove your creditworthiness to potential lenders in the future is to rebuild your finances. Lenders need to see that you have enough income to cover your obligations and will have a little leftover, which provides you with a cushion for emergencies. Rebuilding your finances is a multi-part process.

Create and Follow a Budget

Credit counseling before bankruptcy is finalized should provide budgeting information, but you can seek help elsewhere. Following your budget allows you to monitor and control your spending habits to avoid future financial issues.

Build an Emergency Fund

No matter how long it takes, setting aside money regularly to build an emergency fund will help you cover unexpected expenses. An emergency fund can also help you from having to borrow money or run up credit cards, which can impact your credit report.

Consider a New Line of Credit

After you have worked on your finances and have demonstrated a good payment history with any remaining debt, you may consider building your credit with a new line of credit. Various products are designed to help build credit or that work for people with damaged credit history.

• Secured loans


• Credit-builder loans


• Secured credit cards


• Becoming an authorized user of a credit card


• Ask someone to co-sign a loan or credit card

Becoming an authorized user or joint account holder with someone takes a significant amount of trust between parties, and each party should consider how the other’s credit choices could affect the other’s credit history.

 Rebuilding Your Credit Is Worth the Effort

It does take time, patience, and effort to rebuild your credit after bankruptcy. However, you will see improvements over time by taking concrete actions to rebuild your credit. Building your finances, monitoring your credit reports, and responsibly managing existing or new credit are essential for making positive changes to your credit.