Long after file bankruptcy can get credit card

So you've filed for bankruptcy. You know that the filing will stay on your credit report for at least seven years, and that your credit score's taken a hit.

But when can you apply for a credit card once you've gone through the bankruptcy process? The answer has more to do with you than your bank.

While building credit is important, you won't be able to raise your credit score if you're still struggling to pay off your balance. A big part of your credit score is your "credit utilization ratio," or how much debt you have compared to your overall credit limit.

This can be tough when you have a low limit. If you're worried that access to a credit card will just end with you back in bankruptcy court, it's okay to take a pass for now. If you trust yourself not to rack up credit card debt you can't repay, you can start rebuilding your credit score as soon as you're done filing for bankruptcy. Your FICO score can affect your ability to acquire loans, get approved for an apartment rental and even find a job. The sooner you can reconstruct your credit, the better.

Getting a credit card after bankruptcy might seem counterintuitive, but it is the quickest and easiest way to improve your credit. Lenders want to see you can spend responsibly and make timely repayments. A credit card is a great tool for demonstrating your trustworthiness. A bankruptcy filing is the most severe negative event that can appear in a credit report, and it can do deep, long-lasting damage to your credit scores.

A Chapter 7 bankruptcy , which eliminates all your debts, stays on your credit report for up to 10 years.

A Chapter 13 bankruptcy , which restructures your debts and provides creditors partial repayment, will remain on your credit report for up to seven years.

When you file for bankruptcy , the best your creditors can expect to collect is a fraction of the money you owe them. In a Chapter 7 filing, creditors may get nothing at all. It's understandable, then, that bankruptcy typically makes lenders wary of issuing you new credit.

Some lenders turn down any credit applicant with a bankruptcy on their credit report. Other lenders will consider applicants with older bankruptcy entries, but typically charge high interest rates and fees because they consider bankruptcy filers risky borrowers. As long as a bankruptcy appears on your credit reports, it will tend to lower your credit scores.

But its impact on your scores will diminish over time. Key steps to improving credit scores , after bankruptcy or under any other circumstances, include avoiding excessive debt and high card balances and, most importantly, establishing a record of steady, on-time debt payments on your credit reports. So how do you rack up steady payments if bankruptcy has made lenders reluctant to work with you?

The key is to focus on credit cards for people with less-than-ideal credit, or even cards that require no credit at all. Getting a Credit Card After Bankruptcy Your first step toward getting a credit card after bankruptcy should be checking your credit report and credit score so you know where you stand when researching various cards' approval requirements.

If, like many others who file for bankruptcy, you have credit reports that include late or missed debt payments, maxed-out credit cards, or accounts that have been turned over to collections agencies, your credit scores may have dropped into the fair or poor credit range even before taking a hit from the bankruptcy.

While that may make it tough to get a conventional credit card or loan, there are strategies that can help you start rebuilding credit following a bankruptcy. When looking for the right credit card, your best bet will likely be a secured credit card , which requires you to put down a cash deposit. The deposit amount typically equals the card's borrowing limit, and if you fail to pay your card balance as agreed, the card issuer can take your deposit to cover the debt.

Otherwise, a secured card works the same as a conventional card: You can make purchases up to the borrowing limit, repay them over time as long as you make a minimum monthly payment, and you'll be charged interest on any unpaid balance you carry forward month to month. Secured cards you may be able to qualify for after a bankruptcy discharge include:.

The chief advantage of secured cards is that they usually have lower interest rates and fees than unsecured cards designed for people with poor credit. The main disadvantage of secured cards is low borrowing limits that restrict the types of purchases you can make. But when you're rebuilding credit after bankruptcy, that can also be seen as an advantage: Low spending limits can make it relatively easy to pay your balance in full each month.

Borrowing limits on unsecured cards for users with poor credit tend to be low as well. The chief advantage of unsecured cards is that they don't tie up any of your cash in the form of a deposit—and if you can manage to keep balances low enough to pay off in full every month, you'll avoid interest charges, so their high interest rates won't matter much.

Bankruptcy is a painful process but can be a meaningful way to gain a clean slate on your finances and a chance to rework your approach to credit management. If you resolve to keep credit purchases at a level you can pay off quickly, and avoid excessive debt, your credit standing and credit scores should gradually but steadily improve. Paying your credit card balance in full every month will also help you avoid interest charges and costly late fees.

Even more important is to pay your credit card bills on time. Most credit card issuers offer tools to help you avoid late payments, such as email and text alerts, and the ability to schedule automatic payments every month. Taking advantage of these tools, or using any other method that reminds you to pay your bills on time—smartphone reminders, sticky notes, a desk calendar—can be vital to rebuilding credit after bankruptcy.

How to Build Credit After Bankruptcy Once your bankruptcy is discharged and you've opened a new credit account that you manage responsibly, there are still other steps you can take to help rebuild your credit after bankruptcy :. You may also want to consider using a program like Experian Boost , a free program which counts your payment behavior from your linked checking account that you use to pay your utility, cell phone and video streaming media plans.

Robin Saks Frankel is a credit cards and personal finance writer for Forbes Advisor. Previously, she covered credit cards and related content at other national web publications including NerdWallet, Bankrate and HerMoney. Follow her on Twitter at robinsaks. Select Region. United States.

United Kingdom. Robin Saks Frankel. Forbes Advisor Staff. Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.

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