1. Damage control. Make sure all the accounts you included in your bankruptcy are listed as such and show $0 balances if you filed Chapter 7. If a creditor continues to report the account as delinquent –which they shouldn’t- your credit score will suffer.
2. Get new credit cards. That’s the most important step in your bankruptcy recovery. If you can’t get approved for an unsecured credit card, start out with a secured card. With a secured card, you will make a deposit with the credit card issuer, which will in essence be your credit limit. Typically, after a year to 18 months of on-time payments, you could graduate to an unsecured card.
3. Piggyback. If you have a trusted friend or relative, ask them to make you an authorized user on one of their credit cards. Your bankruptcy won’t affect your friend’s credit, but you automatically get the account history for that card in your report.
4. Bigger loans. What about auto and mortgages? You can start shopping for auto loans as soon as a few months out of bankruptcy. Traditional banks are likely to turn you down, but the financing folks at the dealership may be more lenient, especially if they’re in a bind to meet sales quotas. Mortgage lenders will want to see at least two years of good credit behavior. However, Fannie May has just reduced the waiting time to one year for ‘victims’ of the real estate collapse who have re-established a good payment schedule.