How Long After Bankruptcy Can I Get a Credit Card?

If you're like thousands of Americans who have had their debt discharged through bankruptcy, you might be wondering how long after bankruptcy can you get a credit card? Having a credit card is essential for things, such as paying your bills and shopping for groceries. We will answer this question in much detail below.

How Long After Bankruptcy Can I Get a Credit Card?

You can apply for a regular credit card after filing for bankruptcy, but there is a big chance that you will be denied. The best option for getting a credit card after bankruptcy is to apply for a secured credit card. Secured credit cards are much easier to obtain than regular unsecured credit cards.

If you apply for a regular credit card after filing for bankruptcy, you are likely to be denied because bankruptcy is one of the most negative marks that can be added to your credit report. Also, if you've had your debt discharged, you probably noticed a significant drop in your credit score.

When lenders review your credit report to approve you for a credit card, they will be very hesitant to offer you a credit card because you've mishandled your finances in the past and are therefore highly likely to default on paying back your credit card.

That said, if you have been denied a regular unsecured credit card after filing for bankruptcy, you should explore the option of applying for a secured credit card.

Secured credit cards function the same way as do regular unsecured credit cards, the only difference is that to qualify for a secured credit card, you must place a security deposit (sum of money) with the card issuer to qualify for the credit card.

Your security deposit will typically determine your credit limit. For example, if you place a $700 security deposit, you will be approved for a credit card with a $700 limit. If you make your payments on time for 12 months, many card issuers will refund your security deposit and convert your credit card into a regular unsecured credit card.

So, if you were wondering how long after bankruptcy can you get a credit card, you can get a secured credit card directly after having your debt discharged by bankruptcy.

How Will Bankruptcy Affect Your Ability to Obtain a Credit Card?

To answer this question, we should first discuss the impact that a bankruptcy has on your credit. Filing for bankruptcy is one of the most negative things that can happen to your credit. Many visitors often believe that bankruptcy clears their credit of old debt, but that's not the case.

After you file for bankruptcy, the bankruptcy is added to your credit report and will cause a significant drop in your credit score. Some consumers have reported a point drop of over 150 points.

This significant point drop and the fact that bankruptcy appears on your credit report will make it difficult, if not impossible, to qualify for a regular unsecured credit card after filing for bankruptcy, especially if you're applying directly after filing for bankruptcy.

That said, as the bankruptcy ages, your credit score will recover and you may be approved for regular credit cards. That said, you should keep in mind that a Chapter 7 bankruptcy will remain on your credit report for 10 years from the date that you filed for bankruptcy.

Having said that, a bankruptcy will have the biggest negative impact on your credit score when you first file, as the bankruptcy ages, your credit score will recover slowly. Some consumers have reported being to achieve a 700 credit score in as little as 24 months after filing for bankruptcy.

If you apply for a regular credit card after filing for bankruptcy, you may be denied. If you're denied, you can always apply for a secured credit card. Secured credit cards work the same way as do regular credit cards, the only difference is that you will have to pay a security deposit to qualify.

Using Credit Cards to Improve Your Credit After Filing For Bankruptcy

If you have filed for bankruptcy and you want to improve your credit, you can use a secured credit card to rebuild your credit. To improve your credit using a secured credit card, you first need to apply for a secured card, pay your security deposit, and wait to receive your card in the mail.

Once you have your secured credit card, you should use it responsibly. You can do this by only charging as much as you can afford to pay off at the end of each month. Also, for a secured card to help your credit, you must make all of your payments in full and on time.

Usually, card issuers review secured credit card accounts on annual basis, if the card issuers sees that you've been making your payments on time and are using your credit card responsibly by keeping your balance low, the card issuer may refund you your deposit and convert your account into a regular unsecured credit card.

When it comes to your credit, your secured credit card account status is reported to the credit reporting bureaus just as would a regular credit card. By making your payments on time, you're building good credit history behind this account.

This is why opening and properly using a secured card is a great way to establish a good credit history. So, if you want a credit card after filing for bankruptcy, a secured credit is the best option for you.

Both Bank of America and Discover offer great secured credit cards that you can apply for you to begin rebuilding your credit.

An Alternative To Getting a Credit Card After Filing For Bankruptcy

If you are unable to qualify for a regular credit and a secured credit card, yet you still want to have a credit card, you should explore the option of adding yourself as an authorized user on another person's credit card. That said, once you add yourself as an authorized user to another person's credit card, their credit card's history will appear on your credit report. As such, you should only place yourself as an authorized user on a person's credit card that you trust and know is responsible enough to continue making timely payments on his account. This is so because if he fails to make a payment on the credit card, the negative information will appear on your credit report, lowering your credit score.

Credit Score Planet Frequently Asked Questions (FAQs)

1. How long after chapter 7 can I get a credit card?

Getting a regular credit directly after chapter 7 bankruptcy is very difficult, this is so because a bankruptcy was just added to your credit report and your credit score likely took a big hit after your bankruptcy. That said, you should explore the option of applying for a secured credit card, they are much easier to get since the bank is taking little risk by taking a cash deposit from you.

2. How long after bankruptcy can you get credit?

You may be able to get a secured credit card directly after filing for bankruptcy and having your debt discharged. However, getting a regular credit card will be extremely difficult directly after a chapter 7 bankruptcy.

3. How long does it take to build credit after chapter 7 bankruptcy?

It will take you approximately 24 months to build good credit after filing chapter 7 bankruptcy and that's only if you follow the best practices and open a secured credit card to start building good credit.

4. Will my credit score go up after chapter 7 discharge?

No, after a chapter 7 discharge, your credit score is likely to suffer a huge drop. This is so because bankruptcy is the most negative mark that can be added to your credit report.


What Does Bankruptcy Do To Your Credit Score?

If you had a ton of debt that became unmanageable, you may have filed for bankruptcy for a new start. That said, people often mistakenly believe that they will get a totally clean start after filing for bankruptcy, but when it comes to your credit, the story is more complicated. We will explain what bankruptcy does to your credit in much detail below.

What Does Bankruptcy Do To Your Credit Score?

Although filing for bankruptcy offers a fresh start, bankruptcy is literally the worst thing that you can do for your credit. When a bankruptcy is first reported on your credit report, it will cause significant damage to your credit score, often lowering your credit score by more than 150 points. So, if you care about maintaining a good credit score, you should consider an option other than filing for bankruptcy.

Also, the higher your credit score, the bigger the impact a bankruptcy will have on your credit score. For example, if you have a credit score of 700 or more, a bankruptcy can drop your credit score by more than 200 points. However, if you have a 620 credit score, for example, a bankruptcy can drop your credit score by more than 150 points. So, the higher your credit score, the bigger the drop you will experience.

In the United States, there are two types of bankruptcies that you can file. You have the option for filing Chapter 7 bankruptcy or Chapter 13 bankruptcy.

Chapter 7 bankruptcy involves liquidating (selling) your assets and using the proceeds of the sale to pay off your debt. Of course, most people don't have enough assets to pay off their debts, and so the courts will often forgive the remaining debts.

Chapter 13 bankruptcy, on the other hand, involves discharging unsecured debt, such as medical bill debt and credit card debt while allowing the filer to restructure and repay the remaining debts without having to liquidate the filer's assets.

A Chapter 7 bankruptcy remains on your credit report for 10 years from the date that you filed for bankruptcy, whereas Chapter 13 bankruptcy remains on your credit report for 7 years from the date you filed for bankruptcy.

Regardless of which Chapter bankruptcy you file, a bankruptcy will cause significant damage to your credit, however, as the bankruptcy ages, its impact on your credit score will lessen until it's ultimately removed from your credit report. Once a bankruptcy is removed from your credit report, you will notice a significant boost in your credit score.

Filing Bankruptcy After Defaulting on Your Accounts

Most people who file for bankruptcy have already defaulted on making payments on their credit cards and/or loans and so they have already caused significant damage to their credit.

If you file for bankruptcy after defaulting on several of your accounts, you will notice a smaller drop in your credit score because your credit score has already taken a hit from your previous defaults. The lower your credit score, the less damage a bankruptcy will do to your credit because you've already tanked it.

On the other hand, if you file for bankruptcy prior to defaulting on your loans and missing payments on your credit cards, you will likely experience a much larger drop in your credit score when you file for bankruptcy. So, the higher your credit score, the bigger the drop in your credit score when you file for bankruptcy.

Will Bankruptcy Ruin Your Credit Score?

Yes, filing for bankruptcy will destroy your credit score. Filing for bankruptcy is the worst thing that you can do for your credit. If you have a low starting credit score, a bankruptcy will not do as much damage as it would to a good or excellent credit score.

For example, if you have a credit score of 700, you will notice a points drop of up to 200 points, whereas, if you have a credit score of 600, you may notice a point drop of 130 to 150 points.

Can You Get a Credit Card or Loan After Filing For Bankruptcy?

After you file for bankruptcy, negative information will be added to your credit report, making it very difficult to open credit cards and/or obtain loans. Lenders will be very hesitant to lend you money if you have filed for bankruptcy because it shows them that you've defaulted on your monetary obligations in the past and are therefore likely to default on making payments to them if they approve you for a credit card or loan.

If a lenders does approve you for a loan or credit card after you have filed for bankruptcy, they will likely approve you at a high interest rate and unfavorable repayment terms.

If you have filed for bankruptcy, the best thing you can do is apply for a secured credit card. A secured credit is very similar to a regular unsecured credit card. The only difference is that you have to pay a security deposit and the security deposit you pay will become your credit limit.

For example, if you place a $500 deposit, you will have a $500 credit limit. If you make timely payments for 12 to 18 months, your secured credit card will be converted into a regular unsecured credit card. A secured credit card will help your credit just as would a regular credit card. So, it's highly recommended that you open one to improve your credit after filing for bankruptcy.

Can Bankruptcy Improve Your Credit?

Filing for bankruptcy can improve your credit in the long run, however, when you first file for bankruptcy, the bankruptcy will do significant damage to your credit and credit score.

Filing for bankruptcy may help you in the long run because it discharges unsecured debts that you owe, such as credit card debt and medical bill debt. Discharging debts prevents creditors and lenders from continually harassing your for payments. However, it does not remove them from your credit report.

Delinquent accounts will remain on your credit report even though you've filed for bankruptcy. However, delinquent accounts will only remain on your credit report for 7 years from the date that you first became delinquent on your accounts.

After the 7 year period, the delinquent accounts will be automatically removed from your credit report and will no longer negatively impact your credit score.

That said, filing for bankruptcy gives you the opportunity to open new accounts, such as a secured credit card to begin rebuilding your credit without having to worry about repaying old delinquent accounts.

Without filing for bankruptcy you will have to worry about and continue trying to make payments on old accounts while being harassed by collections to make payments. Bankruptcy stops all of this, giving you the opportunity to focus on your future.

How Long Will a Bankruptcy Remain On Your Credit For?

The amount of time that a bankruptcy will remain on your credit report depends on the type of bankruptcy that you filed. A Chapter 7 bankruptcy will remain on your credit report for 10 years from the date that you filed for bankruptcy. However, Chapter 11 bankruptcy will remain on your credit report for 7 years from the date you filed for bankruptcy.

After the 7 or 10 year period is over, the bankruptcy should automatically be removed from your credit report, no longer affecting your credit score. That said, as the bankruptcy ages on your credit report, its impact on your credit score will begin to lessen.

Some consumers have reported being able to attain a 700 credit score after 2 years of filing for bankruptcy. So, you're not doomed if you file for bankruptcy, but it will take some hard work to improve your credit by following the best practices.

To improve your credit after filing for bankruptcy, you should open a secured credit card, use it responsibly, and make all of your payments on time. This should be a solid foundation upon which you can build strong credit.

Credit Score Planet Frequently Asked Questions

1. What happens to your credit after bankruptcy?

After you file for bankruptcy, your credit score will take a hit. The higher your credit score, the more of a point drop you will experience. That said, as the bankruptcy ages, your credit score will begin to recover.

2. Does your credit score go up after a Chapter 7 discharge?

No, after filing for Chapter 7 bankruptcy, most people will experience a significant drop in their credit score.

3. How much does your credit score go up after bankruptcy?

It is highly unlikely for your credit score to go up after filing for bankruptcy. Most people will experience a significant drop in their credit score. People with a 700 or higher credit score often experience a drop of up to 200 points after filing for bankruptcy. While persons with a 600 credit will experience a 130 to 150 drop in their credit score.

4. How long does bankruptcy hurt your credit for?

A chapter 7 bankruptcy remains on your credit for 10 years and a Chapter 11 bankruptcy will remain on your credit report for 7 years. That said, the negative impact of a bankruptcy will lessen as the bankruptcy ages.