How to Obtain Credit After Chapter 13 Is Discharged

Obtaining credit after your Chapter 13 bankruptcy is discharged may not be difficult. With your bankruptcy completed, you're free to make a fresh start, and many creditors may be willing to help, according to the MSN Money website. The site says you could start qualifying for certain kinds of credit right away, and qualify for competitive rates on all types of loans after about two years. Initially you may have to accept small credit lines as you rebuild your credit.

Instructions

1

Review your mistakes. Take a moment to consider why you originally filed for bankruptcy before rushing out to get new credit. MSN Money says the Chapter 13 experience should serve as a reminder about the dangers of too much debt or not being adequately prepared for financial emergencies. The site says you should make sure you have a safety net in place before taking on new credit. Put some savings away and make sure you're not susceptible to overspending -- especially on credit.

2

Check your credit report. Sure, your unsecured debts, such as credit cards, were wiped out by the bankruptcy, but MSN Money says your credit report may not have been updated. Get a copy of your report from the Annual Credit Report website. Review all of your unsecured debt and confirm that the accounts were were closed and the balances resolved as part of the Chapter 13 bankruptcy discharge. MSN Money says the accounts should be noted as "included in bankruptcy." Write a letter to the credit bureau if that's not the case. Also review your report for any other inaccurate information and dispute this information in writing.

3

Apply for a secured credit card. MSN Money says secured credit will likely will be your best option for credit immediately after bankruptcy. A secured MasterCard or Visa looks and works the same as an unsecured card. However, the secured card requires a deposit into a bank or credit union savings account. The money is held as collateral for the loan, and this usually makes credit approval easy. The amount on deposit becomes your credit line.

4

Make small charges on your secured MasterCard or Visa and pay off the balance each month as you rebuild your credit. After a few months, apply for a second secured card and use it in the same way.

5

Place more money into savings and use it as collateral for a secured installment account. Deposit the proceeds from the loan into your savings and have the bank automatically draft the payment each month. The installment loan with steady on-time payments will also show that you're handling credit well since your bankruptcy. The positive payment history could help boost your credit score, making other forms of credit possible.

6

Apply for unsecured gas station and department store cards after several additional months. Remember to pay off your balances each month. Continue using the new accounts as your credit continues to recover from the Chapter 13 bankruptcy.