Christopher Todd Morrison, P.C.
Affordable Bankruptcy
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Tips to reestablish a positive credit history after bankruptcy

Texas residents may know that a bankruptcy will stay on their credit report for either seven or 10 years. However, it may be possible for people to start rebuilding their credit right away. The first step is to create a budget that makes paying bills on time a top priority. A timely payment history makes up 35 percent of an individual's FICO credit score.

Another effective way for an individual to rebuild credit after a bankruptcy is to obtain a free credit report. Everyone is entitled to a free copy of their report from each of the three major bureaus per year. Individuals should go over their report to check for errors or to see if debts that have been discharged are erroneously listed as late or outstanding. If there are errors, it is a good idea to contact the lender linked to the error or to file a complaint with the credit bureau.

Obtaining a secured credit card may be helpful in reestablishing a positive credit history. A good strategy may be to charge gas or grocery purchases that are easy to pay off in full each month. Before applying for a secured card, people should make sure that the issuer will report all payments made to the credit bureaus.

Those who are looking to get out of debt may wish to file for Chapter 13 bankruptcy. This may allow individuals to reorganize their debts and pay them off over three or five years. During the repayment period, lenders generally cannot go through with a foreclosure or repossession. This may allow a debtor to renegotiate the terms of a secured loan to catch up on late payments.

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