Recovering From Bankruptcy

If you've been through serious financial distress and reached the point where you felt there was no escape other than filing bankruptcy, which is the ultimate black-mark on your credit report, you may be wondering if you have any chance of improving your credit legacy. The good news is, however, that even with a bankruptcy on your record, there are things you can do to begin repairing your credit and restoring the faith of lenders in your ability to repay them.

Start Slow

Rebuilding your credit after a bankruptcy is not a sprint, it's a very long, seven-year marathon that needs to be approached with patience and care. Naturally, most lenders out there are going to be leery of giving you credit anytime soon, but there are options for getting credit, even if you have a bankruptcy in your recent past.

Get a Secured Credit Card

Secured credit cards are easier to get than most other types of credit because they require you to secure your own debt with your own money. Usually this requires that you open a bank account with a lender and deposit an amount - such as $500 - in an account in exchange for a credit card with that amount as the limit that you can charge.

Once you've opened up a secured card, treating it like it is gold and is the sum of your future credit history is important. Pay your bill on time every time without fail. If possible, pay the balance due at the end of every month rather than the minimum payment. This "good behavior" will begin to show up on your credit report in due time and show potential lenders in the future that your attitude toward your financial obligations has improved and you may be worthy of a loan.

Consider a debt and credit-free lifestyle

Another option that fewer people opt for and is actually harder to pull off, is to forego credit entirely. There are those out there who do not use credit for anything and live on a cash basis entirely. After a bankruptcy is probably the best time to attempt such a way, if it interests you. Think of the bankruptcy as a "do-over."