How Soon Can I Get Credit After Bankruptcy?

A bankruptcy will freeze your credit. Generally speaking, you will not be able to get a credit card or most kinds of loans while you are in the bankruptcy process according to Arizona bankruptcy lawyer, Chris Barski. Once your debts are discharged, however, you will typically be able to immediately get credit cards and other lines of credit. The catch, however, is that you might still have a tough time getting any credit with a limit that you’re used to. This credit will often come with a set of restrictions.

A bankruptcy filing will stay on your credit report from 7-10 years, and any determined individual or agency can generally pull up a record of your bankruptcy, as these are a matter of public record. However, there will always be creditors who are willing to lend to anyone, and it’s still fairly easy to get a credit card even if you have a terrible credit score. In any case, it’s up to lenders, banks and other financial institutions to look over your individual case and deem if you are a safe enough risk. Generally speaking, this becomes easier as times passes by.

You should probably get a credit card regardless

So should you quit credit cards altogether? Not necessarily. It might seem strange, but in many instances getting a credit card immediately after your bankruptcy has been discharged is an excellent way to start rebuilding your credit score.  You can do this by demonstrating that you can make timely payments, therefore demonstrating your trustworthiness, which often results in a better credit rating.

The key is to keep your “credit utilization ratio” low. Your credit utilization ratio is the proportion of debt you have to your credit limit. Let’s say your credit limit is $1,000. If your normal credit utilization ratio is 25%, it means your current balance is $250. Paying your balance off on time and Keeping your ceiling from 10-15% — around $100-$150over a longer period will normally result in a gradual improvement of your score.

Of course, if you get a card with a low credit limit (as is normally the case after bankruptcy), this can be extremely challenging, as you’ll have less money to work with. However, perpetually having an unfavorable credit utilization ratio or maxed out cards can put you deeper in the hole, which is something to keep in mind.

Other benefits of getting a credit card after bankruptcy

A number of financial experts do advocate getting a credit card ASAP if only to be able to improve your credit score.  The reason is that a good credit score is often a requirement for renting an apartment, getting an important car or student loan, or even landing a job, which ironically you might need to further boost your income. Getting a credit card right after bankruptcy is basically a calculated risk that can offer you much better flexibility in both your finances and quality of life.

This strategy, of course, depends on how confident you are you will be able to pay off your balance. And as we all know, confidence doesn’t always have anything to do with reality. Having too high a credit utilization ratio and being unable to pay off your cards may eventually send you filing for another bankruptcy, which you would probably want to avoid.


In most cases, you can immediately get at least some form of credit immediately after your bankruptcy case or right after the debts are discharged. This includes credit cards and other lines of credit. However, they will typically come with restrictions that will ease up as time goes by and as you’re able to demonstrate your trustworthiness in paying off your debts.

Even with the restrictions, however, many experts would recommend you get a credit card for the sole purpose of rebuilding your credit score by using it regularly and paying the balance off on time. By keeping the value of the credit purchases small and by paying off your balance on time, you can use this credit as a viable tool for rebuilding your credit score, and thus creating better opportunities for you in the future.

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