Rebuilding Your Credit after Bankruptcy

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Have you recently declared bankruptcy? Worried about how you’re going to get your financial life back on track? One of your primary concerns may be getting another credit card, since most card issuers will close your credit card accounts after you declare bankruptcy.

There’s good news—it may actually be easier for you to get a credit card after you’ve gone through bankruptcy than it was before you filed.

Under current law, you can’t declare bankruptcy more than once every eight years. That means potential creditors, like credit card companies, know that you don’t have bankruptcy as a fall back. You’ll have to repay any money you borrow—including credit card debt--if you possibly can. There are banks and/or credit unions willing to give you a credit card just a few months after your bankruptcy filing is approved. But don’t think that you’ll be eligible for the same kind of credit card that you had before you went so deeply into debt. Your credit limit is likely to be much lower—maybe only a few hundred dollars—and your interest rate much higher than it was on previous cards.

A credit card issuer may also require you to get a secured card. With a secured credit card, you deposit a certain sum into a bank account. That amount is often equal to the credit limit on your credit card. Gradually, after you’ve demonstrated that you can handle this credit responsibly, the bank may increase your credit limit and/or reduce the amount of money that you need to keep in that secured account.

Don’t look for frequent flier miles or other types of rewards cards, either. They are usually reserved for people with good credit scores. You can also expect to pay some kind of application or processing fee and/or an annual fee to get a credit card.

Whatever card you get, make sure that it reports your account activity to the three major credit reporting bureaus—Experian, Equifax and TransUnion.

To start your search for a credit card that you’ll qualify for, check out the section on Bad Credit Credit Cards on this site. Remember—you’re looking for a secured credit card and not a prepaid credit card.

Next steps

No matter what credit card you get, make sure that you handle it responsibly. Pay your bills on time. If you pay the balance off in full each month, you won’t have to pay any of the high-rate interest on an account balance. (You don’t need to carry a balance from month to month to have it count towards improving your credit score.)

Check your credit record. The bankruptcy is already a big strike against you; don’t let an incorrect report pull your credit score down even more. (Visit to find out how to get your annual free credit report from each of the three major credit unions.)

Apply for a small loan. If you’re demonstrating that you’re handling your credit card account well, your bank or credit union may be willing to lend you a few hundred dollars after a year or so. Having another account in good standing will help raise your credit score.

Resist temptation. As time progresses, you may start getting pre-approved credit card offers in the mail. Consider carefully before you apply for any of them, especially if excess credit card spending is what led to your bankruptcy. Ask yourself, “Do I really need this card?”

Be patient and keep on track. It took time to get deeply enough into debt that you had to declare bankruptcy. Getting your credit score into the good to excellent range is going to take some time—but it is possible.

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Please note your financial situation is unique and our tips & advice presented here may not be appropriate for your situation. recommends that you seek different advice & opinions from your own accountant or financial adviser who understands your individual circumstances before making any important decisions or implementing any financial strategy.