Rebuilding credit takes time, but it won’t take as long most creditors would have you believe. It is also possible to rebuild your credit while in a chapter 13 bankruptcy.
Before you can start rebuilding credit, your chapter 13 plan must be confirmed by the bankruptcy court and you must obtain permission from the chapter 13 bankruptcy trustee to incur any new debts.
You must obtain new debt after filing bankruptcy in order to rebuild your credit score.
It is unlikely you will qualify for an unsecured credit card while in a chapter 13 bankruptcy until after 24 months has passed since you file. Many credit unions offer ‘secured’ credit cards to members who have filed bankruptcy. A secured credit card requires a deposit. Contact your local credit union for more information. You must be a credit union member to qualify and your accounts must be in good standing. If you included the credit union as a creditor in your bankruptcy, the credit union is unlikely to approve you for a secured credit card. You should plan to make a deposit of at least $1000 for a secured card account.
After you have obtained new credit, you should not use anymore than 10% of your available credit. Keep a small balance on your credit cards. Do not pay-off the entire balance monthly. Pay on time or pay early.
Certain retail stores offer in-store credit cards to those wishing to rebuild their credit.