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Nowack & Olson, PLLC Florida Bankruptcy Lawyer
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Rebuilding credit after Chapter 7 bankruptcy

Many people who have completed the Chapter 7 bankruptcy process understand that it is an effective form of debt relief. That being said, eliminating one’s financial history means that a person has to reestablish his or her credit rating and confidence in the eyes of lenders. There are several things that people can do as they begin the process of reestablishing their financial footing following personal bankruptcy to help ensure they get the most out of the experience.

Bankrate explains that filing for Chapter 7 bankruptcy can actually improve the borrowing status of a person. Despite the fact that bankruptcy initially has a negative impact on a filer’s credit rating, it also often drastically improves a person’s debt-to-income ratio. That alone can contribute to the rebounding of a credit rating, and lenders may also be encouraged by the fact that recent filers cannot pursue bankruptcy again for years to come. Therefore, recent filers should be encouraged to begin reinventing their credit history.

Recognizing that people’s credit rating may reflect major changes during and after bankruptcy, it is recommended that they become well acquainted with their credit reports. Not only is it important to identify any and all potential discrepancies that may appear on the report but it’s also helpful to see improvements as they occur. Depending on the amount of time that has passed since the bankruptcy was finalized, along with the filer’s original credit score, changes to the rating may happen slowly.

One way to develop new credit history and improve one’s credit rating is to take out a new credit card loan. According to, secured credit cards are ideal for people who have completed bankruptcy because they are issued according to a cash deposit instead of a person’s supposed reliability. Illustrating responsible spending habits and payment history through the use a secured credit card can go a long way to improve one’s credit rating, which in turn can lead to other borrowing opportunities in the future.

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