5 ways to build credit after a bankruptcy

Couple farmers holding hands, walking on road along farm Couple farmers holding hands, walking on road along farm Image:

In a Nutshell

You can work on building credit after a bankruptcy by disputing any errors on your reports, taking out a secured credit card or loan, having your rent payments reported to the consumer credit bureaus or becoming an authorized user on someone’s credit card.

Editorial Note: Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors' opinions. Our marketing partners don’t review, approve or endorse our editorial content. It’s accurate to the best of our knowledge when it’s posted.
Advertiser Disclosure

We think it's important for you to understand how we make money. It's pretty simple, actually. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials.

Compensation may factor into how and where products appear on our platform (and in what order). But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That's why we provide features like your Approval Odds and savings estimates.

Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can.

The bankruptcy process can be financially turbulent. But when it’s done, you can work to steer your finances in the right direction and start restoring your credit.

Depending on the type of bankruptcy you file, a bankruptcy can stay on your credit reports for up to 10 years, but Ruth Susswein, deputy director of national priorities at Consumer Action, says your credit can rebound long before that point.

Here are five ways to help build credit after bankruptcy.


  1. Check your credit reports regularly for errors
  2. Consider a secured or retail credit card
  3. Consider a credit-builder or secured loan
  4. Ask for payments to be reported to the credit bureaus
  5. Become an authorized user on an account

1. Check your credit reports regularly for errors

Credit reports aren’t perfect. In a 2012 Federal Trade Commission study, about 25% of U.S. consumers identified errors on their credit reports that might have affected their scores. Checking your reports regularly can help you find and dispute any errors.

Check your TransUnion® and Equifax® credit reports for free

Get Started

After your bankruptcy is completed, make sure …

  • The accounts that were discharged in bankruptcy are reported as “discharged.”
  • The discharged accounts have a $0 balance.
  • The bankruptcy filing date is correct. (The bankruptcy remains on your account for up to 10 years from this date, so accuracy is important here.)

Dispute any errors you find, and if the error is on your TransUnion® credit report, you can file a dispute through the Credit Karma Direct Dispute™ tool.

How to dispute an error on your credit report

2. Consider a secured or retail credit card

Bankruptcy can hurt your purchasing power, but it shouldn’t destroy it entirely. You may still qualify for certain types of cards.

Secured cards

Secured credit cards require an upfront deposit, which helps protect the lender in case you can’t make payments. In exchange, you’ll get a credit limit that’s typically equal to the deposit.

But before you apply, read the fine print. Some cards won’t approve your application until your bankruptcy is resolved.

Retail cards

Retail credit cards may also come in handy post-bankruptcy, as they can have looser credit requirements than other unsecured cards. But watch out: Many have high interest rates and penalty fees.

With either type of card, the basic credit-building goals apply: Don’t take out more credit than you need, make on-time payments and keep your balances low. Setting up automatic monthly payments and balance alerts may help you meet those goals.

At a glance: Secured credit cards that can help you build credit after bankruptcy

Discover it® Secured Credit Card May get your deposit back after eight months
Capital One® Secured Mastercard® Possible higher credit line after making your first five monthly payments on-time
Navy Federal Credit Union® nRewards® Secured Credit Card Low variable APR of 10.49%–18% on purchases and balance transfers

From our partner

Capital One® Secured Mastercard®

From cardholders in the last year

See Details, Rates & Fees

3. Consider a credit-builder or secured loan

A traditional credit-builder loan is designed to help you build credit. It works a bit differently from other types of loans.

Instead of getting the money up-front, the lender puts the loan proceeds in a savings account until all the payments have been made. At the end of the loan term, you can collect the cash — and if you’ve made on-time payments, you’ll likely help your credit.

Note that “credit-builder” loan can have more than one meaning, so make sure you understand the type of loan you’re applying for before you commit.

You can also check out secured loans. Secured loans are backed by collateral, like funds in a savings account or a vehicle, which can be claimed by the lender if you can’t repay the loan.

These loans may be good options if a secured or retail card could tempt you to overspend. But make sure you can afford the interest rate, fees and monthly payments on the loan before applying.

4. Ask for payments to be reported to the consumer credit bureaus

If you’re making on-time rent payments every month, why not let them boost your credit?

Ask your landlord to report your monthly payments to the three major consumer credit bureaus — Equifax, Experian and TransUnion — or let companies like RentTrack help take care of it for you.

But there’s a caveat: Even if the information makes it onto your credit reports, not every credit scoring model actually uses that information. Certain credit-scoring models, like FICO® 9 and VantageScore® scores based on your Experian credit report, use available rental-payment information when calculating scores, and FICO® Score XD even uses reported cellphone and utility payments.

Unfortunately, you can’t control which scoring model a lender uses to check your credit — but you could ask about this before you apply for a new line of credit.

Check your TransUnion® and Equifax® credit scores for free

Sign Up

5. Become an authorized user on an account

This means that someone else — typically a close friend or relative — adds you to their credit card account. Your credit can benefit from their positive account history and on-time payments, and your own preexisting credit history won’t hurt theirs. You can use the credit card in your name, but you’re not legally responsible for paying it off.

The flip side? Your credit may suffer from the primary accountholder’s bad credit moves, and it may be hard to get removed from the account. Consider this credit-building method only if you trust the person to be responsible with the account.


Bottom line

It may not seem like it, but rebuilding your credit after bankruptcy is possible. Consider some of the steps we’ve listed here to help you get started.

Monitor your credit reports, use a secured card responsibly, consider a secured or credit-builder loan, look into getting your payments reported to the bureaus or become an authorized user.