It’s a common misconception that filing for bankruptcy means you’ll have bad or no credit for the rest of your life.  That’s just not true.  Of course your credit score is going to take a hard hit in the aftermath of bankruptcy, but as the saying goes, nothing lasts forever.  Not even bankruptcy.

First of all, while a bankruptcy can show up on your credit report for as long as 10 years, you can actually start rebuilding your credit the same day that your bankruptcy case is closed.  By taking on responsible credit habits like paying all bills on time, using only small amounts of your available credit, and keeping your available credit as low as you possibly can, your credit score will slowly but surely start climbing back upward.

You have to establish–and use–credit in order to build up your credit score.  While you may want to hold off on this if you truly cannot handle the responsibility of managing credit wisely, if you can handle that responsible, you need to start doing what you can as soon as you can.  If you already have credit cards, cut down to the minimal amount of credit you need.  Spend as little as you can and pay it off as quickly as possible in order to get your score creeping in the right direction.  If you don’t have credit cards and can’t qualify for unsecured credit, you may want to apply for secure credit instead.  This means you put down a cash collateral deposit which becomes your available credit line.  You’ll definitely want to shop around and find a decent secured credit card that doesn’t charge exorbitant fees.  Don’t just sign up with the first company you see.  Do your research.

It’s imperative that you clean up your credit report after bankruptcy.  Many people emerge from bankruptcy only to discover that their credit reports show inaccurate information–like accounts open and overdue when they were actually cleared and closed during bankruptcy.  It’s a good idea to check your credit report after bankruptcy and, if any accounts are misrepresented, contact the credit bureaus and insist they change them to report “included in bankruptcy.”  Otherwise, your credit score may never recover.

Another way to help rebuild your credit post bankruptcy is by getting an installment loan.  If you already have student loans–which typically are not discharged during bankruptcy proceedings–paying them on time can go a long way toward improving your credit score.  Try paying more than the minimum amount due whenever you can.  Making payments on time and paying debt down as quickly as possible are two of the best ways to raise your credit score.  Auto loans can also help rebuild credit, but you’ll likely have to play extremely high interest rates at first.  Some things that may help if you go this route are making a big down payment and making sure your loan does not include a prepayment penalty.  That way you can refinance the loan as soon as your credit improves.

The key ingredient to all of this is by acting conservatively and responsibly when it comes to your finances.  Filing for bankruptcy doesn’t mean you’re giving up on your credit score.  It’s designed to help those in need get a fresh financial start.  Rebuilding your credit doesn’t have to be as hard as you imagine.  The sooner you start, the sooner you–and your credit score–can be your old selves again.  If not better.