Dear Credit Karma, How do I start rebuilding my credit after filing Chapter 7 bankruptcy?
Bankruptcy will deal a devastating blow to your credit and credit score, but rest assured, rebuilding your credit and lifting your finances out of the red can start right away. A Chapter 7 bankruptcy is a liquidation bankruptcy, meaning it wipes most of your debt and you receive your bankruptcy discharge in 4 to 6 months after filing. In fact, a Chapter 7 bankruptcy can sometimes improve a credit score in some cases because so much debt is discharged. After a bankruptcy, steer clear of: • Applying for a loan or mortgage. A bankruptcy on your record makes you a subprime borrower: lenders charge you a high interest rate, steep penalties, and consider you a greater risk. Your low credit score qualifies you for a rate 2 to 4 percentage points higher than a normal borrower, which amounts to thousands of dollars difference in payments. • Using a credit repair agency or service. These are scams that claim they can remove the bankruptcy from your credit report or fix your credit score, and wil
