Rebuilding Your Credit After Filing Bankruptcy

Our clients who work diligently to immediately start rebuilding their credit after their bankruptcy case is discharged are often able to have “good” credit scores within 15 months after discharge.

For these clients, they are able to seek relatively competitive interest rates for credit accounts or car loans. Regardless of what caused your need to file bankruptcy, Albuquerque Business Law will provide you will all the tools necessary to rebuild your credit after filing bankruptcy. While we can’t actually take these steps for you, we will assist and guide you through the rebuilding phase so that you can truly get the fresh start you deserve after your bankruptcy.

Despite what credit card companies want you to believe, anyone who files for bankruptcy CAN rebuild their credit.The first, and most, important advice is to not allow yourself to fall behind or get any accounts placed in collections, especially within the first few years after a bankruptcy.

With that in mind, here are the actions that can be taken to actually improve your credit score after a bankruptcy:

1. Set-Up And Follow a Budget

The simplest way to get your finances on a secure footing is to set-up and follow a household budget. Some financial experts believe in the old-school methodology of using different envelopes for each of your categories of spending and only permitting you, and your family, to use the funds in the envelope for each category of spending. When the envelope is empty, you are not supposed to continue spending on any items in that category until the envelope is replenished.

That may work very well for some people, but there are also tremendously valuable resources available on the internet for those that are a little bit more tech-savvy. For a simple monthly budget calculator, go to which is an online software tool that will calculate your expenses and budget for you.

I strongly recommend, because after it is set-up it will access all of your accounts in real-time and provide that information to you in the form of a “financial dashboard” that allows you to keep track of income and expenses. Mint can also be configured to track your spending, automatically place all of your transactions into certain user-defined categories, and send you text message and email updates when you are nearing your budgeted amount for any category. It will even update you when your paycheck or other large deposit has been made to any of your accounts.

2. Start Saving

Another important step to rebuilding credit is to start saving. The importance of saving is that it allows you to create an “emergency fund” in the event anything unexpected happens. If something unexpected does happen and you do have some amount in savings, you will not be at risk for missing any payments on accounts. Saving is like building a wall around your credit, it is purely a defensive maneuver but it can be very effective in preserving your credit in certain situations.

3. Grow Credit

View and Manage your Credit Score

Firstly, do not get tricked into any of those “credit score scams.” Only you can improve your credit score. But, this can be done by regularly viewing and managing your credit profile. There are many free services which will permit you to do this, and you may also request a free copy of your credit report from each of the three credit bureaus.

The credit score service that we recommend is, which will allow you  (FOR FREE) to view your credit score (an unlimited number of times) and it offers very helpful advice on how to improve your credit score.

Get a secured credit card

Secured credit cards are a good choice for consumers who feel they will be turned down for a regular credit card. Secured cards require applicants to open a savings account that secures the credit limit on that plastic. This protects the issuer in case the cardholders cannot pay their balances.

It is important to obtain a secured credit card that reports to the credit bureaus. The secured credit card provider that we recommend is Orchard Bank. Their information and application can be found at

Open a CD

Many credit advisors recommend opening a CD at a bank, as a way to rebuild credit while earning some money. The funds in the CD can be borrowed against and banks will generally not be too concerned about your credit score since the loan is secured by the funds in the CD. This allows you to obtain credit without having to pay extremely high rates of interest or other ridiculous fees that credit companies sometimes try to charge our clients to establish credit after a bankruptcy.

Yes, You Can Rebuild Your Credit After Bankruptcy!

About James T. Burns

Prior to the practice of law, James was a corporate manager with a large market research firm. James has started and successfully managed businesses of his own, primarily in the area of technology start-ups and aims to help clients achieve their legal and business goals.


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