Credit repair after bankruptcy: Fixing your credit report after going bankrupt is possible

11 ways to build up your credit score and get your finances back on track after bankruptcy.

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Fact checked

Your first bankruptcy will stay on your credit report for six years, while your second bankruptcy will stay on your report for 14 years. While it seems like bankruptcy will have an ongoing impact on your financial situation forever, that’s just not the case.

There are ways to improve your credit report and increase your chances of loan or credit card approval after bankruptcy. Check out these steps you can follow to begin repairing your credit history, plus learn about different financial products that can help you build up your credit score so you can move past bankruptcy.

Get your credit score

Name Product Starting price Trial period Price per month Credit scores Credit monitoring Credit reports Update frequency
Credit Verify
$1
7 days
$19.95
TransUnion
Yes
TransUnion
Monthly
Instantly access your credit score and report online and get daily alerts and updates. Plus, premium members get $25 in bonus rewards every month which can be used towards discounts on everything from shopping and entertainment to dining and travel.
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11 ways to start repairing your credit score after bankruptcy

Building up healthy financial habits is the best way to repair a bad credit rating that comes from having bankruptcy listed on your credit report. It’s important to realize that this process takes time — the longer you focus on these credit building strategies, the more positive of an impact you’ll see reflected in your credit report in the long run. Repair your credit score with the help of a credit repair specialist or on your own by following these suggestions:

  1. Work on your employment circumstances. The financial security that comes from having a stable job can improve your credit rating by showing lenders you have a regular source of income — so it’s a great first step to take.
  2. Budget. It’s likely you’ve veered off the path of your budget in the past if you’ve declared bankruptcy. This time around, draw up a budget and stick to it to avoid any situations that could land you in hot water.
  3. Start saving. Start by regularly putting money aside, even if it’s just a small amount that you transfer to a dedicated savings account. It’s an aggressive goal, but aim to have enough money in your savings to cover six months worth of expenses.
  4. Emergency fund. This is similar to savings, but more of a rainy day fund. Having an emergency fund will prevent you from maxing out a credit card or taking out a payday loan when unexpected expenses pop up — think car or urgent home repairs.
  5. Limit your credit applications. Too many credit applications can negatively affect your credit history. After bankruptcy, it’s important to be selective about the types of credit you apply for to increase your chances of approval. Only apply for financial products that are likely to be approved, such as secured credit cards or loans.
  6. Get rid of nonessential expenses. Water, electricity and groceries are essentials, but consider cutting corners to save some money. Take shorter showers, lower the heat and put on layers, don’t go out to eat, reduce the data on your cellphone bill or get rid of cable television. You can free up some serious cashflow if you’re willing to sacrifice some of the luxuries you have.
  7. Make payments on time. Whether you have a secured loan, credit card or an electricity account in your name, making sure you pay the balance on time will help you build up good credit history after bankruptcy. Delinquencies — missed or late payments — can linger on your credit report for up to six years.
  8. Talk to providers. If you want to find out what options are available after bankruptcy, consider calling up banks and other lenders to discuss your situation. They’ll be able to advise you on your eligibility and answer any specific questions to help you find options that’ll work for you.
  9. Don’t close existing or new accounts. When you close credit accounts, you shorten the length of your credit history and reduce the amount of credit that’s available to you. Since both of these factors go into the calculation of your credit score, you should keep all of your accounts open. If you think you’ll be tempted to spend on a credit card, shred it.
  10. Monitor your credit report. Order free copies of your credit report from the two credit bureaus — Equifax and TransUnion — once every year. Look for errors and dispute them to remove any negative information from your report.
  11. Monitor your credit score. By keeping an eye on your credit score, you’ll have a general idea of what financial products you’re eligible for. Some credit card providers and finance websites offer to show you your score each month, otherwise you may have to pay to find out so frequently.

Get help with credit repair after bankruptcy

Name Product Interest Rate Max. Loan Amount Loan Term Fees Min. Credit Score
Marble Fast-Track Loan
19.44% – 31.90%
$20,000
36-84 months
Legal and admin fees of $295 - $1,500 (based on size of loan)
300
Marble Financial offer credit builder loans in amounts from $5,000 to $20,000. Improve your financial health within 36 months. This loan is strictly for borrowers exiting a consumer proposal.
Refresh Financial Credit Builder Loan
19.99%
$25,000
3-5 years
No administration or origination fees.
300
No funds are provided by Refresh upfront. Instead, funds are placed into a secured account to be accessed later. Your payments are reported to the credit bureaus, potentially impacting your credit score.
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Name Product Price per month Credit scores Credit monitoring Credit reports Update frequency
Marble Financial Score-Up
$49.99, $66.99 or $99.99
TransUnion
Equifax
Yes
TransUnion
Equifax
Monthly
Score-Up uses software to help you build or rebuild your credit score. Set targets, access your credit score anytime, monitor your progress and find out what actions you should take to increase your score as quickly as possible.
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What types of financial products can help me rebuild my credit after bankruptcy?

The most important thing after bankruptcy is taking the right measures to improve your credit history. Only apply for a product when you’re confident you’ll meet the eligibility requirements and can manage the account responsibly. Remember that it could take some time before a lender is willing to approve your credit application after bankruptcy.

Some different types of credit that can help improve your creditworthiness after bankruptcy include:

  • Secured personal loans. There are two types of secured loans you can take out: one option, which is your typical secured loan, lets you borrow the loan only when you provide an asset as collateral, while the second option is a credit building secured loan. For this type of loan, you’ll make payments until the loan has been paid in full, and once it’s paid off, you’ll then have access to the money.
  • Secured credit cards. Secured credit cards are a useful financial tool for consumers looking to rebuild their credit. To get a secured credit card, you’ll need to provide a deposit which will represent your credit limit. So if you deposit $300 and the annual fee is $29, your available credit limit is $271. Keep in mind that annual fees and interest rates may be higher with secured cards. After making payments and staying in good standing for one or two years, request to move to an unsecured credit card with the same provider, or apply with a new provider.
  • Retail credit cards. Store credit cards generally have higher rates of approval. However, be aware that they’ll also come with less favourable interest rates and fees. It’s important to pay your balance in full each month to avoid any extra charges due to interest.
  • Loans or credit cards with a cosigner. If you’re having trouble getting approved for credit on your own, asking a family member or close friend with a healthy credit history to cosign should help you get access to a credit card or a loan. Remember that cosigners are putting their creditworthiness on the line to vouch for you, so if you can’t manage your finances properly, it can negatively impact their credit history – plus they’ll be the one held accountable for the unpaid debt.
  • Low income credit cards. Credit cards with a low minimum income requirement typically offer little in terms of features. However, this could be the right type of tool to manage your finances and rebuild your credit score.

When using new credit accounts after going through bankruptcy, it’s essential that you confirm with the lender that it reports your activity to the two credit bureaus: Equifax and TransUnion. On top of that, make sure payments are being made on time and that you’re keeping your credit utilization ratio well under 30% to ensure your credit score doesn’t get damaged.

Did you know?

You can build your credit as an authorized user on another person’s credit card account. As an authorized user, you can use the account freely, but won’t be directly responsible for making payments to the lender. The account owner is essentially trusting that you’ll use the credit card responsibly while you piggyback off of their good credit to build up yours.

Can a credit repair agency help me fix my credit report after bankruptcy?

These “credit fix” or “debt solution” companies can advise and act on your behalf to challenge any incorrect listings on your credit report. Credit repair agencies can’t magically fix your credit report after bankruptcy, instead they set you on the right path and teach you the basics of getting your score going in the right direction.

Even though you can teach yourself about credit repair, some people would rather save the time and go directly to the experts. When getting a credit repair agency to help you improve your credit report, make sure you compare different options and research their services so you know exactly what you’re paying for. There are many scams out there, so you’ll want to find a reputable company that is going to be worth the cost.

Bottom line

After dealing with bankruptcy, you can start to develop and practice healthy financial habits in order to reclaim your creditworthiness. By maintaining full control of your credit and staying within your budget, you can focus on improving your credit report to get your financial life back together again.

As mentioned above, always make sure a credit provider reports to the two credit bureaus, Equifax and TransUnion, in order to build up your credit score. You’ll also want to make sure you always make timely repayments and spend well below your credit limit in order to maintain a healthy credit utilization ratio.

Frequently asked questions

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