Rebuilding your credit after bankruptcy is much like building credit from scratch. In most cases, the best way to rebuild your credit after going bankrupt is by getting a credit card and consistently, reliably paying the bill.

Get a Credit Card

When you first declare bankruptcy, your best option is to get a secured credit card. Secured credit cards are designed for people with bad or no credit, and can only be obtained by putting down a security deposit. The security deposit establishes your credit limit. The more money you put into the security deposit, the higher your credit limit.

Unlike prepaid credit cards, secured credit card companies report your activity to the crediting bureaus. In other words, paying your credit card bill on time will earn you good marks on your credit score. These good marks will eventually allow you to get a more traditional line of credit.

Pay Your Bills

Credit cards aren't the only bills that can affect your credit score. Any company can report defaulted loans and unpaid bills to the crediting agencies. To avoid bad marks on your credit score, continue to pay your household bills on time and consistently.

Monitor your Credit Score

Watch your credit report for errors and signs of identity theft. Contact the credit bureaus right away to correct any errors on your credit report, to ensure that your credit score is accurate and reflective of your credit history.

Give it Time

Time heals all wounds, they say. This saying also applies to wounds on your credit history. Your credit score will take a dip when you declare bankruptcy, but as you pay your bills and avoid going back into debt, slowly but surely, your credit score will begin to tick up.

On average, people who have declared bankruptcy have credit score about 70 points below people who have not declared bankruptcy. Yet within a couple years of declaring bankruptcy, many people are eligible for car loans and mortgages, just people who have no bankruptcy on their credit history.

In other words, by paying your bills and keeping a low debt-to-income ratio, it's only a matter of time before you'll have a good credit score once again. Building your credit after bankruptcy takes effort and diligence, but it can be done.

For more information about ways that you can build your credit history after filing for bankruptcy, speak with your bankruptcy attorney. He or she will be able to advise you on the best methods to improve your credit history after your bankruptcy discharge. For more information, contact Wiesner & Frackowiak, LC.