Filing bankruptcy is a financially and emotionally draining experience. When it is over, there is a negative mark on the credit report that will take years to remove, and it is nearly impossible to get approved for a credit card or a loan. After filing bankruptcy, consumers are freed of their debts, but the trade off is spending years rebuilding a credit score.
There are two questions that are frequently asked by consumers going through bankruptcy. First, are there any shortcuts for removing a bankruptcy from my credit report? Second, how can I improve my credit score if I can’t get approved for anything? These questions actually have easy answers, but they aren’t always the answers that people want to hear.
To the first question, there is no easy fix to removing a bankruptcy from a credit report. The only reasons why a bankruptcy can be removed from a credit report is if the information is incorrect or outdated. Chapter 7 bankruptcies should be removed from credit reports 10 years after the filing date, and Chapter 13 bankruptcies should be removed from credit reports 7 years after the filing date. Unless there is an error in the listing or it is outdated, the bankruptcy will stay on the credit report. It isn’t a nice, neat answer, but it is an honest answer.
As for the second question, there is a very easy way to start building good credit history after a bankruptcy. Many banks offer secured credit cards that report to the “Big 3” credit bureaus, Equifax, Experian, and TransUnion. Secured credit cards are attainable for consumers with bad credit because they put down a deposit for it. For example, if they want a secured credit card with a $2,000 credit limit, they will be required to put down a deposit of $2,000, or at least a fraction of it. After getting a secured credit card, they have to keep the account active by making charges to it and paying it on time, and over time, the card will continue reporting positively to the credit bureaus and improve the consumer’s credit score.
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