You can get a good credit rating by performing credit repair after bankruptcy. In fact, after Chapter 7 bankruptcy, you can get credit cards, prime rate mortgages, and a life. Your credit will repair itself if you pay on time, and correct your credit report after filing bankruptcy. Future good credit comes from making loan payments on time after your discharge.

Although we recommend one service for credit repair after bankruptcy, don’t be taken by most of the credit repair and sweeper places. Even if you only pay rent and utilities, you will normally qualify for normal rate home mortgages two years after discharge and there are possible prime rate home loans and refinancing during Chapter 13. Just download our manual and talk to us!

What You Need to Know About Performing Credit Repair after Bankruptcy

Bankruptcy is not the end of getting credit cards, auto loans, or mortgages—it is the start. You don’t even have to accept high rate loans for autos after you file. Credit cards, home mortgages, and personal loans are possible as you repair your credit. But you do have to work at it and we show you how. Simply look over our site and download our manual and read it to learn how.

⎆ How to Improve Your Credit Score after Bankruptcy

Lexington Law is a law firm that will remove your incorrect, outdated, or misleading credit information. In 2020, the basic package is $89 per month. With their services, over the course of a year, they do about as much as can possibly be done to improve your credit.

Your FICO credit score uses five factors and, believe it or not, a 950 score is possible. Filing bankruptcy only drops a 500 score about 20 points at first. By paying on time after bankruptcy, your scores can increase 100-200 or more points within two years. By paying on time on three types of credit your credit score will rapidly increase. Those types of credit are as follows:

  • Home mortgage
  • Car loans
  • Credit cards

However, opening credit with “Buy Here Pay Here” car lots and finance companies actually hurts your score. In fact, it will not rebuild well as accounts with banks. FICO is used by mortgage companies and the major banks. There are other scores such as Beacon but, they are worthless.

The five FICO factors are as follows:

  1. Previous Credit History 35%  (After bankruptcy as you make payments on time your score improves.)
  2. High levels of Debt to Income 30%  (After Bankruptcy your debt to income is reduced increasing your score)
  3. Limited Credit History 15%
  4. New Credit Applications 10%
  5. Limited Types of Credit 10%

⎆ Prime, Sub-Prime, and Damaged Credit

Prime: If your credit score is above 600, you are considered a “prime borrower” and you have no problem getting mortgages, cars, or credit cards.

Sub-prime: Credit scores below 600 are “subprime”. You might have higher interest rates but there are lenders. Then, this extends down to about 500. Again, the lower your credit score the higher your rates, and the harder it is to get credit.

Damaged Credit: Credit becomes too expensive to use. A rating below 500 is the Damaged Credit Zone. You may get a credit card but at such high fees and uselessly low credit limits that credit is too expensive. Plus, the interest is double the normal rates for prime borrowers. In addition, you pay more for insurance and might be barred from some jobs. The truth is, bankruptcy is often your only way to repair bad credit. With bankruptcy, old unpaid debts drop off and as you repay on time while performing credit repair after bankruptcy.

⎆ What a Low Credit Score Costs You

Credit Cards: The few credit cards that are available for people with damaged credit have very low credit limits, high fees. These lenders often do not report good credit activity to FICO making it impossible to repair your credit with them.

Automobile Financing: If you have bad credit, your interest rates are much higher for auto loans.

$20,000 car paid over 5 years:










Home Mortgage: The cost of a home can more than double if you buy a home from a sub-prime lender at higher rates. Even a very small inexpensive home costs between $100,000 and $180,000 more in interest if you are buying a home with bad credit. We used actual mortgage rates for 2003 and 2004 to show your costs below:

$100,000 home paid over 30 years:









⎆ Fix Your Credit Score

Now that you know how your credit score is calculated and the costs, you can begin to repair your credit score. Here are the 4 things that will help after bankruptcy.

  • 35% of your score: Pay your bills on time and your score will improve over time.
  • 30%: Bankruptcy will dramatically lower your Debt to income ratio.  Keep your balances low on credit cards. Have less than 7 open accounts.
  • 10%: Rarely apply for credit.  Applying for credit often lowers scores.
  • Make sure the information in your credit report is correct. Removing negative items on your credit report has the largest impact on your FICO score. Use our letters in the forms section.

⎆ Repairing Credit After Bankruptcy

If you don’t repair bad credit after bankruptcy, it will cost you. For example, only 200 points cost you $300 per month more for your $150,000 home with higher interest rates. It means the difference between driving a Ford or a Mercedes.

The amount of incorrect information on most credit reports is amazing. Then, add the true negative items and it is almost impossible to get good credit after bankruptcy. Unfortunately, many creditors such as Capital One and the “Buy Here Pay Here” car lots engage in credit reporting practices that keep your credit scores low.

One method to repair your credit reports is to hire a law firm to clean your record and dispute the inaccurate, incomplete, misleading, unverifiable, and outdated information. You can try writing letters yourself. But, credit reporting agencies often ignore your letters because most people aren’t persistent or they don’t keep good records. That’s in addition to the fact that individual people almost never sue the credit reporting agencies.

⎆ Credit Repair Scams

Many credit repair agencies are scams. Often, they tell you to get a false ID which isn’t credit repair and isn’t legal. They want to collect high fees from you and often charge over $1,000 upfront for no results. After that, they often shut down and leave town. They also lack any muscle in filing a lawsuit against a credit reporting agency. Due to the high number of scams, the FTC has created special rules to attempt to shut these places down, but the scams still persist.

You are not supposed to be able to repair or remove true credit information. However, if a bank fails to validate credit information, even true credit information is sometimes removed. Even bankruptcy and judgment liens are removed from some credit records by this method.

Lexington Law is a law firm that will repair your incorrect credit report information. The cost in 2020 is $89 per month. Over the course of a year, they perform about as much credit repair for you as can possibly be done. has free credit reports, so, you don’t have to pay credit watching fees to obtain free credit reports.

Resources for Bankruptcy

Louisville Kentucky Bankruptcy Forms

Bankruptcy Manual

Other Related Information

How to Get a 725 FICO Credit Score after Bankruptcy

Credit Counseling to Meet Bankruptcy Requirements

Getting a Mortgage Loan after Bankruptcy

If you are thinking about filing bankruptcy, don’t delay because timing is crucial. I am here to help you. So, contact my office right away to start the conversation. Nick C. Thompson, Bankruptcy Lawyer: 502-625-0905.