What Is the Best Way to Repair Your Credit After Filing Bankruptcy?

Updated on February 12, 2008
S.M. asks from Chico, CA
27 answers

I filed for bankruptcy 6 years ago...and have yet to even TRY to think about doing anything on credit since. However, my husband and I want to buy a house, therefore, I want to get on the road to fixing my credit score. Question is, what is the best way to go about this? My husband thinks I should get a secured credit card and begin there...good idea??? Bad??

THEN, there is the question of if/when we go to buy a house will my poor credit hurt us and therefore, not use my credit score in the process?

Thanks for any help, advice or leads in the right direction!

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So What Happened?

Thanks to everyone who responded to my request! I guess I have nothing to fear, but fear itself! :) I am very nervous about jumping back into the "credit waters" again...but I do need to repair my credit. Thank you again, ladies!

Featured Answers



answers from Portland on

Hi S., My husband Nick is a mortgage and investment specialist and would be able to answer you rquestions and hopefully get you into a new home.
His email is
[email protected]____.com
his phone number is ###-###-####.
Please feel free to give a call anytime!



answers from Seattle on


Been going through the same thing. we paid off as much debt as we could to help credit. We also got a car and added my name. Plus, i did get my own card. It has all helped tremendously. Hope this advice is what you need.




answers from Seattle on

Hi S.,
Have you talked to a lender? My sisters friend filed bankruptcy and two years later her and her husband were able to buy a house. btw he had filed bankruptcy several years earlier as well. Good luck.

More Answers



answers from Portland on

I bought my first home after filing Bankruptcy after only 3 years. I had a very goood loan person. His name is Merrick and here is his contact info.
1301 SE Tech Center Dr
Ste 150
Vancouver, WA 98683
Phone: ###-###-####
Toll Free: (800) 867-5733
That might not be his direct line, but you should be able to ask for him.
It is a lengthy process, but they can do miracles. You can talk to him about what you want, and your situation and he will let you know honostly what he can or can't do for you right now. You'd be suprised. Let him know J. Owings sent you. (I'm assuming your in Vancouver, if not you could as him for a referral for someone in your area) Oh, yeah, Do not start changing anything about your credit right now. Don't apply or pay off anthing, cause it does affect your credit. Wait till he tells you what you need to do.
Good luck.



answers from Seattle on

Hi S., My name is C. and I am a Real Estate Agent. I Know quite a bit about Credit and you CAN recover from a bankruptcy. I do credit Repair, it works really well. What I do is I pull the credit and write to all the cridit places. i try and contest all the negative things on your report. I have helped peoples credit up to 60 points!! Where do you live?



answers from Spokane on

Just FYI, when still in bancruptcy, any type of credit is under the bancruptcy meaning it does not count either way. So, it is obsolete. If the bancruptcy is done, the best way is a secured credit card. You can always call your lawyer for help on the issue...you did after all pay the lawyer for help.....

You can get a house under a banckruptcy, its not easy nor is it cheap, but it can be done.



answers from Honolulu on

how long has it been since your bankruptcy was discharged? if it was 6 years ago, that's a while back, so I think it would have some impact (if you haven't done any credit since then, then it may be different and the bankruptcy is the only credit you've established). you should look into pulling your free consumer copy of your credit report to see what kind of comments are one there. You can get them directly from the credit bureaus...experian, equifax, transunion. You won't get a credit score (you have to pay for that), but you can get an idea of what it looks like and if you've made progress restoring your credit (paying bills on time) since your bankruptcy. as far as buying a house, there are so many programs out there that are created for people in the same situation...you are definitely not the first. Your credit score shows your credit worthiness, so the lower it is, the more of a risk you are. financing is still available, but most times you'll pay a higher interest rate. but owning a home is still definitely possible. Good luck.



answers from Sacramento on

First get a copy of your credit report and determine what needs to be cleaned up. Or you could talk to a lender and they can tell you what needs to be cleaned up and where to start.

please send me your email address so that when I do want to order something I can..
my address is [email protected]____.com I use to be in PC as well.



answers from Spokane on


You'd be suprised how easy it is to buy a home, especially that far out from a bankruptcy. I'm only 3 years out from mine and my husband has never done anything on credit in his life, and we got a great loan with a great interest rate this past September. When we sat and talked with our Mortgage rep. (a fantastic guy--if you're in the Spokane, WA area let me know and I'll get you his name and number) he gave us some tips since we plan to refinance in the next couple of years.

A) get a secured credit card, most preferably from your bank. Use it once a month (I have my cell phone billed to it) and pay it off as soon as you get the bill each month.

B) buy a smaller ticket item on credit. I have a tire account at our local dealer where I buy snow tires and car batteries and the like.

C)Don't apply for too much too often. Every time you apply for a credit card, account, or anything else for that matter they run your credit score, which in turn drops your credit for a few weeks.

D) Take yourself off of the credit mailing lists. Again, those pre-approved offers drop your credit score a few points everytime the junk mailers run their list. You can do that at www.optoutprescreen.com for a period of 5yrs at a time. Takes a few weeks for it to stop, but after that there's no more offers in the mail box. Saves you from possible identity theft too.

Good luck!!




answers from San Francisco on

Hi S.,

First of all let me congratulate you for taking the first step to homeonwership, knowledge is the key. It is great that you want to find out what the best thing to do is before you go out there and start looking for your dream home.

I am a Realtor with Prudential California Realty and I service the bay area which includes San Francisco, San Mateo, Santa Clara, Contra Costa and Alameda Counties. I personally live in San Ramon and I am not sure where you live, I read over some of the responses and they seem to be coming from different states.

I can direct you to finding the help you need where ever you live. I want to let you know that many of the responses you received are correct and can help you.

The first thing I would do is look at your credit report from all three major credit bureaus, TransUnion, Equifax and Experian. Make sure you ask for your credit score aswell and compare the reports to make sure you agree with everything.

Sometimes you may think that your credit is horrible because of bankruptcy when it fact it can be ok, you definetely need to look at those reports and your score before you can decide what you should do next which would be to either work with a credit repair company or with a lender, I suggest using a mortage broker that a direct lender, just because they can get creative and have more programs available.

If there is anything I can help you with please let me know, you can e-mail me at [email protected]____.com or contact me at ###-###-####.

Good luck to you and best wishes for your family,

I. Vargas



answers from Los Angeles on

Apply for an UNsecured card or several of them first! My husband and I have a BK that will be 2 years old in July and we were able to get credit thru Capital One unsecured. As for buying a house you should have no problem. My girlfriend does loans and she said she could get us approved with no trouble once we hit the 2 year mark. Good luck to you!



answers from San Diego on

My name is R., my company can help people even 1 day out of bankruptcy, contact me via email [email protected]____.com I promise not to waste your time, because that would be a waste of my time!! i can also be reached at 1-800-948-6094 ext 122

have a good one



answers from Anchorage on

I filed 3 years ago and have talked to banks here in Alaska and they say no problem...it may only affect your interest rate. As long as you or your husband has been working for 2 years steady preferably at the same job. Mosts lenders say that aa banckruptcy is not the lifetime credit killer it used to be. Car dealerships want to give me a car too.
Call and get a pre qual for yourselves at any bank that doesn't lock you into anything...they will just check your credit, most over the phone, they will give you a credit score and how much you qualify for.. My bet is that they will lend you much more than you need for a house.



answers from Medford on

I have been told by various financial consultants, loan officers, etc that having a credit card with little or NO balance does look good. You would have to use the card and pay it on time to help build your credit. But either pay it off each month or keep the balance real low, way under the max of the card. I would suggest using the card for things you would usually buy anyway - groceries, utilities - and pay it off every month. Good luck. I hope this helps and sorry I don't know more.



answers from Corvallis on

Hello there S.,

My husband and I are now looking into purchasing a home. We have done a lot of research and found that there are quite a few programs out there with good lenders for those of us who are credit challenged. :) We had a bankruptcy only a year ago. We've found a lender that actually pre-approved us for 100% financing! Just find a loan officer that you trust and ask them to pull your credit. They can let you know what you need to do and what you are qualified for. If you'd like more details as to which lender/loan officer we used, please let me know. I'd be happy to share.

Good luck!



answers from Seattle on

A secured credit card is one of the best ways to repair your creit because you NEED to get some good information on your credit report because you probably don't have anything on there but your bankruptcy. IF you can get a regular credit card then great but don't go applying for a million cards, all those requests can negatively hurt your credit score also. It depends on how you want to do it with your home loan. If you need dto use your credit because of an income you are brining in then do it, but if you don't then the only reason I see for putting you on the home loan with your credit is to help repair your credit. A home loan if paid on time and the information is all positive will help boost your credit score because you have something positive on your credit report. If you don't make the money in the household. If you and your husband were to get divorced someday or if he were to die then you would need to rely on your credit and wouldn't be able to just use his so I would highly suggest trying to repair your credit, but if it REALLY impacts your home loan interest rates then I wouldn't use the home loan as something to help boost your credit score. It just takes time and patience really, my husband and I have been trying to clean up and boost his score for about 3 years now and it's a VERY SLOW process. We decided not to file bankruptcy but to pay everything off so that is some of the slowness but it's all been paid off for a while now and it doesn't just automatically come off, so you just have to wait. My parents are having to co-sign with us for our home because I have AWESOME credit but don't have an income. Good luck with it!



answers from Las Vegas on

Hi S.,

My name is H. Buck and I am a Realtor and a mortgage consultant. We specialize in clients that have gone through bankruptcy and other credit issues. We have been able to get clients into homes one day out of bankruptcy so if you would like more information on how to improve your credit score or how we can help you, feel free to contact me at ###-###-#### or ###-###-####.

H. Buck



answers from Eugene on

You can usually get a mortgage just 2 years after your bankruptcy if you have had clean credit since. Call one of my preferred lenders: Deanne at Diversified Mortgage ###-###-#### or Rene at Western Mortgage Brokers ###-###-#### and they will take care of you!
I am a Realtor so if you need any help, let me know when you are ready!



answers from Phoenix on

I personally never filed bankrupcy but my mother has and I have learned alot from her. after her bankrupcy it took a long time for her credit to build back up. she got a car loan first. then when her credit was good enough a cell phone, then she finally got aprooved for a mastercard with Orchard bank. that helps alot. so does capitol one. you apply only for these places. Just be careful not to go over 50% of the avalible credit and also make a little more than the monthly min payment every month. DONT PAY OFF every month. wait for like 6-8 months before you pay a balance in full. and the 50% thing is very crutial. in fact i think most lenders sugest not to go over 30% so check into that. you can look on www.mycreditkeeper.com and get a free trial. I use them every month. it's like $10 and you get all three creit companys and scores. and it updates every month when you pay your $10. Really cool. My suggestion with that website is do it 5 days into the month maybe even 7-10 because that's when they all report is the first week. you want all company's on your credit updating at the same time.
Good luck



answers from Los Angeles on

We had the same problem and yes (for us) getting a credit card was one of the ways that helped us better our credit. We've been on our house now for 6 months!!! Do you have a financial consultant? Try ours Thomas Sim (Thomas) [email protected]____.com

No fee for meeting him and getting advice.
Hope this helps!




answers from Sacramento on

According to the BBB there is no such company that can legally repair credit after any reason. These companies take your money and usually just files disputes which take the info off of your credit record for a short while. But once the info is checked out and its accurate it comes back onto your credit record,and the company when contacted will say. We did what we promised its not our fault that it was reversed or some other such nonsense. At least that is what I remembered from local newscast from where I lived before.
W. H.



answers from Portland on

The first thing to do is to pull your credit from all 3 credit agencies and make sure that everything on it actually belongs there. Many times accounts that were included in your bankruptcy are still on there and show as outstanding. If you do have items on there that shouldn't be, then you need to write to the credit agencies and tell them that you want those items reviewed and removed.

The second thing to do *IS* to open 3 lines of credit--car loan/credit card/etc. Basically any trade line that does report to the credit agencies. If you open a credit card, then you need to use it, but you also need to pay it off every month or at least keep it below half the limit.

Finally, once you establish your 3 credit lines, don't open any more, don't close them, and keep the balances low.

As for your poor credit hurting your chances of getting a house, it depends. If you and your husband can qualify for a loan without any of your income, then as long as the loan is in his name then your credit won't hurt the loan. However, if you both need to be on the loan then yes, your credit score can hurt your loan chances.

My husband is a mortgage broker and handles issues like this on a regular basis. If you'd like any more information, just let me know. :)




answers from Las Vegas on

This is kind of silly to say, but I don't think that the bankruptcy will hurt you as much as you think... especially if you've been good about paying all your bills since then. We filed about 5 yrs ago after my hubby lost a great job and couldnt find something quick enough. We have bought 4 cars since then, as well as refi'd our house three times! And we have a few credit cards with normal interest rates. If you are patient and look around for good rates, you will be fine. Getting a credit card will help you, just make sure you dont max it out, or it will hurt your credit rating. I heard somewhere that you should never have more than HALF of the limit on your credit cards. No matter what - you will be able to qualify for the loans - the credit rating affects the interest rates - the better your credit, the better your rates will be. So, if you've been current on whatever you've paid so far, I bet you'd be okay. Good luck.



answers from Seattle on

I am a Real Estate agent for RE/MAX performance Plus in Renton. I have been through many lenders who have said they can "Find the BEST loans for anyone". I found that there is a lender different from the rest. Her name is Tiffany Anderson. She will really help you with as much as you need. If it takes a year to help you she is willing to do it. I have had clients thank me for sending them to her. It's her passion to really help out. If you have any questions on how to "fix" your credit she will guide you through the steps personally. I strongly encourage you to contact her and ask what it is you need to do. If you don't want pressure she will be good to contact. ###-###-####
Just willing to help. That's all.
Take Care,
G. D.



answers from Portland on

well S. my husband and i filed bankruptcy almost 4 years ago and 2 years ago we were able to buy a new house and also have 2 new vehicles. We had an awesome mortgage broker who helped us with our credit and also we started out slowly gettin a couple credit cards. IF u need more info send me a private message



answers from Portland on

We have all heard the statement, “Credit repair is a scam!” You have read the negative news articles that state that you should stay away from credit repair companies, and that there is nothing a credit repair company can do for you that you cannot do yourself. The reality is that there are some credit repair scams out there, and there are a lot of credit repair companies that are not scams, but simply do not do a good job for their clients. Fortunately, there are a few simple things for you to know that will allow you to make an informed decision about enrolling in a credit repair program.

First of all, let’s define what we mean by the word scam. I think that there is a tendency for people to label anything they are not 100% satisfied with, as a scam. This is not the correct use of the term. A scam is a deliberate and premeditated method of taking your money without delivering a stated product or service in the manner advertised or promised. With that definition, I can tell you that as far as credit repair goes, most of what is being called a scam is really just a poorly designed or improperly managed business. Let me explain the credit repair business models as employed by nearly every credit repair company in existence, and I think you will see and understand why there is so much negativity surrounding credit repair.

Here is an outline of the two most common business models for a credit repair service. After each one, I will outline the problems associated with it, then, I will show you a better way to do things:

Model 1: (this is the most common credit repair company business model)

Step 1: Setup fee of $50-$200 is charged and client agrees to an additional $20-$75 per month service fee.

Step 2: Client is instructed to order their own credit reports by mail or online and forward them to the credit repair company.

Step 3: Credit repair company receives client’s credit reports and begins first disputing cycle (usually 30-45 days). At completion of cycle, the credit bureaus will mail updated credit reports to consumer. Client must review and mail them back to the credit repair company for work to continue.

Problems with model 1:

First of all, the number one problem is that the consumer has paid money before any services have actually been performed. The credit repair company will not do any work until you have sent in your credit reports. So, my biggest question is what is the justification for the setup fee? The monthly fee is also questionable because whether you send in your updated reports or not, they will still continue to charge you a monthly fee even though they did not do anything for you.

The majority of complaints against credit repair companies state that the consumer was charged for services not rendered. The Federal Credit Repair Organizations Act (CROA) clearly states that a credit repair company can only charge for services that have already been performed. If this is the case, why are all these companies charging before they perform services? Located in the fine print of most of the credit repair company contracts it is stated that the monthly fee is being billed for services performed the previous month. It is simply a technicality that they are currently getting away with. This has not gone unnoticed by government and state officials. In fact, many credit repair companies have been shut down and fined in the past few years, but it seems that kind of action requires a huge number of complaints.

Another problem is that many clients have extreme difficulty obtaining their credit reports. Most consumers are unaware of all the different versions of credit reports that are available today. The most effective credit reports for credit repair can only be obtained directly from each of the three major credit bureaus, Equifax, Experian, and Transunion. There are a variety of reasons the credit bureaus make it difficult to get your credit reports directly. Often clients will simply give up without even getting their reports, and now have to attempt getting their money back that they have already paid to the credit repair company.

Model 2:

Step 1: A one-time service fee of $300-$2,000 is charged upon enrollment. This is payment in full for services that have not yet been performed.

Step 2: Client is instructed to order their own credit reports by mail or online and forward them to the credit repair company.

Step 3: Credit repair company receives client’s credit reports and begins first disputing cycle (usually 30-45 days). At completion of cycle, the credit bureaus will mail updated credit reports to consumer. Client must review and mail them back to the credit repair company for work to continue.

Problems with model 2:

The number one problem here is that you are paying in full for services not yet performed. This is directly against the federal guidelines for how a credit repair company is to operate. This is how many very small credit repair companies operate because they do not have enough operating capital to perform services before payment. This means that if they do not perform services to your satisfaction, and you ask for your money back, you may find that they don’t have the money to refund you. When it comes to this type of company, it is “buyers beware”. Also note that once they have your money, there is no longer a lot of motivation for them to continue working on your credit. Will they continue to follow up with you to make sure you received your updated reports? How long are they willing to work on your case?

A better credit repair model: Now I will outline a much better model. This one puts the client first, and puts the entire burden on the credit repair company to produce results before any payment.

Step 1: Free Consultation and Credit Evaluation. This can easily be done over the phone in a few minutes, but allows for a client to determine if a credit repair program is even appropriate, get some advice about their credit, and get assistance obtaining their reports from each of the three credit bureaus.

Step 2: Free Credit Repair Estimate. The client’s credit reports are reviewed and an estimate for services is provided. It is clearly laid out so that the consumer can see that they will only be charged if and when a negative item is corrected or deleted. There are no other fees of any kind.

Step 3: Program Enrollment, Payment Setup, and Begin Services. Only after a client has approved an estimate, is a payment arrangement setup. This is a progressive, performance-based billing model. The client makes monthly deposits into a deposit account to cover any earned fees during the course of the program. Fees are only earned when the credit repair company corrects or deletes a negative credit item. If no credit items are fixed, the credit repair company does not earn any money, and the client is refunded the entire balance of the deposit account if they choose to quit the program. Keep in mind that since the credit repair company assisted the client in obtaining their credit reports, they are ready to get started with the services immediately upon approval of the estimate.

An additional note about Licensing and Bonding: There are currently only a few states that require a credit repair company to be licensed and bonded, so most companies are not. The advantage of working with a company that is licensed and bonded is that they have undergone scrutiny by both the state in which they operate, as well as the insurance company that has bonded them. They have also been required to put up collateral, or show significant business capital to ensure that they can be held liable for their client’s money. Understanding how most of the credit repair companies operate, I would highly suggest that you only work with one that is licensed and bonded.

In my opinion, this is the only way to run a credit repair company. As you can see in this model, everything is centered on the client’s needs, and requires good communication with the client throughout the program for fees to be earned. It puts the motivation on the company to provide good services, instead of on the client to make sure the company is doing what they are supposed to do.

I have yet to find another company doing business in this manner, and am sure the reason is because it is a lot more difficult and less profitable from a company perspective. However, doing right by the client will ensure a long-standing business, and a steady stream of referral clients. If more companies would take this responsible approach, there would not be so many claims of scams.

Now that you have this insight into the credit repair business, you will be able to make a more informed decision about the credit repair company you choose.

H. Vandehey
Debt Consultant Credit Repair Specialist
Direct: 866-513-1603
Fax: ###-###-####



answers from Washington DC on

I filed with my ex husband in 1996. I have one year left for it to be on my credit report but I have owned several homes, have many credit cards and bank loans. You need to start small with your local bank. Get a credit card or a loan for a car or furniture. I filed in 1996 and owned my first home in 2004. But in the meantime I still had my car loans and some credit cards opened. Hope this helps. It can be done. My credit score is really good now. Good luck and let me know if you have any more questions.

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