How to rebuild your CIBIL/Credit Score after bankruptcy

You can take the following measures to start fixing your CIBIL score:

Check your credit score:

1. Familarise yourself with your credit score primarily to rebuild your CIBIL score after bankruptcy
2. Free copy of credit report can be accessed through AnnualCreditReport.com
3. Free credit reports are available only once a year
4. Consider what makes up your credit score to make necessary improvements in case your credit score is not increasing
5. Spot errors, such as inaccurate public records or incorrect account information that are decreasing your credit score
6. Review your credit report timely to confirm that bankruptcy have been removed from your credit report

Track your credit score:

1. Bankruptcy leads to a drop in your credit score by 100 to 200 points or even more
2. Make sure to check your credit score every month to improve your credit score after bankruptcy
3. Utilising free online service, create an account to check credit score from time to time
4. Once account discharged, confirm the changes by checking the credit score
5. Identity theft or other issues, to avoid further decrease in credit score
6. Inaccurate account statuses or civil suits or judgments you weren’t involved in or fraudulent loan applications in your name may impact your credit score

Practice good credit habits:

1. Make on-time payments to rebuild credit score after bankruptcy, as payment history contributes 35% to your FICO Score calculation by staying on top of other bills, such as utilities
2. Keep credit balance low to rebuild credit after bankruptcy, as the balance you owe is 30% of your FICO Score calculation, by reducing card usage
3. Reduce the credit card use as much as possible after bankruptcy to avoid the risk of falling into same financial problems
4. Keep emergency fund ready to avoid unexpected expenses like car repairs and medical bills
5. It takes two months to two years to improve your credit score after bankruptcy for which it is important to practice responsible credit habits

Obtain secured credit card:

1. Reduce dependency on your credit cards to rebuild credit score after bankruptcy
2. Use secure credit cards strategically to prove your trustworthiness to the lenders
3. Making a refundable security deposit and then borrowing against it is necessary to take secured credit card
4. These cards come for high interest rates but are great for building your responsible credit behaviour until you qualify for traditional cards that comes with competitive terms and conditions
5. After consistent on-time payments, you may even become graduate for unsecured credit cards after using secured credit cards that results in achieving unsecured credit cards 
6. To avoid further damage to your credit score, choose a provider that offers prequalification as applying for a secured card do not guarantee acceptance

Build your credit through credit-builder loan:

1. You can build your credit score after bankruptcy without applying for traditional bank loan, by apply for credit-builder loan
2. A certain sum of money is held in the secured savings account or certificate of deposit in the borrower’s name with the credit builder loan
3. You may also have the option of secured loan depending on the bank where you have borrowed the money against savings account
4. Credit-builder loan payment activity is reported to the credit bureaus by the financial institutions that helps improving the credit score

Take help of co-signer to qualify for loan agreement:

1. Co-signer can help you qualify for a loan or rental agreement after filing for bankruptcy
2. If the primary borrower fails to repay the loan, then the co-signer pays back the loan amount

1. The loan funds or financed property cannot be possessed by the co-signer but they are responsible for the outstanding loan balance in case the primary borrower fails to make on-time payments
2. Choose your co-signer carefully who is financially stable and is willing to do so

Become authorised signer to build your credit score:

1. It is easier to build your credit score as an authorised user on some else’s credit card
2. Make sure to have a credit card attached to another borrower’s account and not to yours’
3. This way the card can be used for purchase but cannot modify the account
4. To improve credit score by slowing down the credit utilisation rate, you need to make the credit card payments on time as this payment will show up on your credit report
5. To enhance the chance of increasing your score, make sure that the credit card company reports authorized user payments to the three main credit bureaus

Never go to a credit repair service to fix your CIBIL score:

They are expensive and not everyone is legitimate and hence beware of these services. It is best that you fix your own credit so you will know where you went wrong in the first place and you will know that you must not repeat the same mistakes again.

Stay within your credit limits:

Once you have managed to re-establish your credit, it is of utmost importance that you stay within your credit limits. Keep the credit balances low and repay them on time and don’t default on any payments.

Don’t close the accounts:

1. When you are closing a credit card, you will be reducing the amount of credit that is available to you and it further decreases your credit score.
2. It is best to keep all the credit lines open and if you believe that you will spend on your credit card, cut it off and choose a credit card that will not charge you a high annual fee and keep paying it to retain the credit that is available to you.

1. Take loans that are easy to obtain and make all the payments on time.
2. Utilise low credit and don’t close a line of credit as it will reduce the amount of credit that is available to you.

1. Keep a close eye on your CIBIL report annually for the errors and inconsistencies.
2. When you are bankrupt, it is the best time for you to start an emergency fund to rely on as you will not have any debt.
3. Take a car loan so that it helps you improve your credit, and it will also be a part of an investment. Learn from your previous mistakes and avoid them.

How Long Does It Take to Rebuild Your Credit Score After Chapter 7 Bankruptcy?

Here are the following details as to how long does it take to rebuild credit score after chapter 7 bankruptcy:

1. The chapter 7 bankruptcy remains for 10 years on the borrower’s credit report
2.  All records of bankruptcy get removed from credit report after 10 years
3. The impact of bankruptcy decreases with time
4. The immediate reduction in consumer’s debt-to-income (DTI) ratio which is you owe in corresponding to the amount of available credit you have
5. Thereby, you can notice improvement after two years of discharge

How Long Does It Take to Rebuild Your Credit Score After Chapter 13 Bankruptcy?

Here are the following details as to how long does it take to rebuild credit score after chapter 13 bankruptcy:

1. It takes seven years to rebuild the credit score after chapter 13 bankruptcy
2. It generally takes 12 to 18 months to improve credit score after your Chapter 13 bankruptcy is discharged
3. Restructured debt can be refinanced after 18 months

A good credit score can help you secure lower interest rates on loans and credit cards.

Get Free Credit Score