No one takes the decision to file for bankruptcy lightly. Many people who do so have already exhausted all other financial avenues. Many people who file for bankruptcy end up wondering, “how do I fix my credit?” or “will I ever be able to buy a home?”While fixing your credit after a bankruptcy seems daunting, it is possible if you follow certain steps.

What happens to credit after bankruptcy?

When you file for bankruptcy, your credit score can drop as much as several hundred points. The bankruptcy can show up on your credit reports and stay there for about seven years. Not only that, but any accounts that you include in bankruptcy will also show up on your reports and hurt your credit score.

Since filing bankruptcy lowers your credit score, it lowers your chances of qualifying for loans or credit cards on your own. If you do happen to get approved for any type of credit, you’ll likely end up paying higher interest rates and fees.

Fixing your credit after a bankruptcy discharge

Luckily, bad credit doesn’t last forever. There are several steps you can take to help you fix your credit after your bankruptcy has been discharged. Here are some of the things you can do:

Step 1: Review your credit reports

Before you begin rebuilding your credit and applying for new credit, you will want to review your credit reports to make sure everything is as accurate as possible.

When you first look at your credit reports following your bankruptcy, you will notice that there is a lot of information that has a negative impact on your score. The positive angle is that your credit has nowhere but up to go from here. Your goal now is to get it as high as possible.

Getting copies of your credit reports

You can request a free credit report from all three credit bureaus– Experian, Transunion, Equifax– once a year. Visit to get your free credit reports. These reports do not provide a credit score. If you would like to obtain a copy of your credit report with your credit score, the bureaus will give you the option to do so, but you’ll have to pay for it separately.

It may take a little bit of work with the bureaus to make certain they are all reporting accurately, and the reports are as clean as possible. Experian is the most commonly used credit report, but you will want to make sure all three reports are as accurate and clean as possible.

Make sure all accounts on the report are accurate and are actually your debts.

Dispute any accounts you do not believe are accurate, you do not recognize, or you legitimately believe should not be listed on the credit report. The only items that can be removed from a credit report are inaccuracies and accounts that are not yours. Creditors should be reporting your information accurately and that is what should be reflected on your reports.

Review the credit inquiries on your report.

When you apply for credit, it’s called an inquiry. Make sure you recognize all inquiries being reported and that they are legitimate. Legitimate inquiries will be from the creditors listed in the bankruptcy and any other place where you applied for credit. Any other inquiry that you did not authorize should be removed.

Step 2: Update personal information

Updating your basic information is important in re-establishing your credit. Creditors want to see that you have lived in one place for a long period of time. Rental stability is also important. Make sure that your residential history is current and accurate. If there are errors, request that the bureaus fix them immediately.

In addition, include your employment history. Creditors also like to know you have a stable job. These steps can help improve your eligibility for future credit applications.

Step 3: Go over accounts showing “included in bankruptcy”

You will need to make sure all debts included in the bankruptcy are being reported as “included in bankruptcy” and show a zero balance. You do not want these accounts to continue showing new delinquencies going forward. This will damage your credit and your ability to reestablish it. The last delinquent payment reported should be the month after you filed your bankruptcy. It may be wise to send a letter to all three bureaus with a copy of your bankruptcy discharge letter, notifying them of the bankruptcy and requesting them to report all debts included in the bankruptcy as “included in bankruptcy.”

Step 4: Look for old accounts

Generally, an account can be listed on your credit report for seven years from the date of the last activity. The last activity is the last date of payment or the last date of purchase. Once this time period has passed, you can notify the creditors to request that they remove the account(s). Understand what the last dates of activity were on your accounts so you can have them removed as soon as possible.

Step 5: Verify any new collection activity is accurate

When a creditor determines you are not going to repay them, they “write-off” the account. Typically, this means they have sold the account to a collection agency. In many cases, the collection agency handling your delinquent account does not receive proper notification of the bankruptcy from the original creditor.

Usually, the collection agency opens a new collection account on your credit report for the account even though the debt was eliminated through the bankruptcy. Make certain that the dates listed on that new collection account reflect the dates listed on the original debt owed and not the date the new collection account was posted.

The dates listed on both accounts should reflect the dates from the original debt account. This way, the debt will clear your report seven years from the date of the last activity and not from the date the account was posted.

Step 6: Apply for new credit and be responsible with it

Besides checking all the information on your credit reports, applying for new credit is also important. While you may think you would not be able to qualify for any type of credit, this isn’t the case. If you put a deposit down, a secured credit card can be easier to get and can help you rebuild your credit as long as you pay it on time each month.

Following these steps is just the beginning to rebuilding your credit after bankruptcy. This will ensure that your credit report is clean and accurate as you begin trying to raise your score. As you begin to apply for and receive new credit, make sure you make your payments on time and do not take on more credit than you can handle.

If you’re considering filing for bankruptcy, contact us for a free consultation today by calling or texting 801-544-5306. Our lawyers can help you understand what your options are and if bankruptcy is the right option for you.