How to Get a Good FICO Score After Bankruptcy

Updated on May 8, 2020
carolynkaye profile image

After a bankruptcy, I educated myself about personal finance and how to maintain a good credit score.

Here are the five things I did to get a good FICO score after bankruptcy.
Here are the five things I did to get a good FICO score after bankruptcy. | Source

I’ve recently hit the two-year mark since my bankruptcy was discharged, so I decided to check my FICO score. I was surprised to see it was 730, which is well into the 'good' range.

Like many other people who go through a bankruptcy, I was worried my credit would be damaged for a long time and believed getting a good interest rate on a loan or being approved for any type of credit would be unlikely.

If you’re going through a bankruptcy or know someone who is, here are the five simple steps I took to bring my FICO score into the good range since my bankruptcy.

FICO Scores are used in 90% of credit decisions, so they're a very good barometer of how your credit can look to potential lenders.

— Experian

1. Two Months After My Bankruptcy Was Discharged, I Applied for One Secured Credit Card

I have heard of people being approved for regular (unsecured) cards right after bankruptcy, but I decided to go with the secured card because I felt my chances of approval were better.

Following my bankruptcy, I started to receive numerous credit card solicitations in the mail, all of which had outrageous annual fees, huge security deposits and insane interest rates.

I shredded those and went online to research the best secured credit cards for people rebuilding their credit. The same few names came up again and again, so I applied for the Capital One Secured Mastercard. (As of April 2018, it has no annual fee and a variable purchase rate of 24.99%.)

To date, the card has been trouble-free and has worked very well to help improve my credit score. Each month, I make a few purchases on the card and pay them off in full and on time when the bill comes, so I never pay any interest. The card reports to all three credit bureaus and offers the chance to ‘graduate’ to a regular card once your credit improves.

Below, I've listed a few other secured credit cards to consider after bankruptcy. Some have no annual fee and the minimum refundable security deposit amount varies with each card. They all report to the three credit bureaus, which can help improve your FICO score as long as you make your payment on time each month.

If you're thinking of a secured credit card, I suggest you thoroughly research them and check the credit card company's website for the most up-to-date information.

  • The Discover it Secured Credit Card
  • USAA Secured Card Platinum Visa or USAA Secured American Express (For active and former military members and their families only)
  • Citi Secured Mastercard
  • U.S. Bank Secured Visa Card

A secured credit card can be a valuable tool to improve your FICO score following a bankruptcy.
A secured credit card can be a valuable tool to improve your FICO score following a bankruptcy. | Source

Have you applied for a credit card after bankruptcy?

See results

Prepaid Credit Cards vs. Secured Credit Cards

Prepaid credit cards (the kind you can purchase in stores) are not the same as secured credit cards. Prepaid cards do not report to the credit bureaus, so they won't help in rebuilding your credit or improving your FICO score.

2. I Didn’t Apply for Lots of New Credit

I know it’s not always possible to avoid applying for new credit, but limiting the amount of new credit inquiries on your credit report works in your favor when it comes to your credit score. This includes applications for any type of loan, mortgage or credit card just to name a few.

The other reason to avoid applying for too much new credit when you’re recovering from bankruptcy is to keep from becoming overburdened with debt and risk getting back in the same situation that led you to bankruptcy.

That said, if you do apply for new credit and make every payment on time each month, that can reflect positively on your credit report.

Tips to Increase Credit Card Approval Odds After Bankruptcy

1. Don’t apply to a credit card company that was included in your bankruptcy.

2. If you’re turned down for a credit card, wait a few months before you apply again or try a different card company.

3. I’ve Stayed Out of Debt

In addition to avoiding new debt, I’ve found ways to cut costs. If you look closely at everything you spend money on, you can usually find creative ways to reduce the amount of money you spend on everyday things.

It helps to record your expenses in a notebook dedicated for this purpose, or use one of the many expense-tracking apps.

Even small purchases like coffee and snacks add up, so track your expenses for a while to see where you tend to spend the most money.

Avoid new debt by finding ways to cut costs. For example, shop the clearance rack in the back of your favorite clothing stores or purchase clothes off-season for big savings, even on brand names.
Avoid new debt by finding ways to cut costs. For example, shop the clearance rack in the back of your favorite clothing stores or purchase clothes off-season for big savings, even on brand names. | Source

Some Ways to Cut Costs:

  • Use a pre-paid cell phone plan to limit your monthly cell phone bill costs.
  • Cancel your cable or satellite TV service or change your subscription to their lowest cost plan.
  • See movies during matinee hours rather than paying evening prices.
  • Rent DVDs and books from the library to save money.
  • Shop at discount stores whenever possible.
  • If you buy products online, always search for the site that sells the item at the lowest price and use coupon or promo codes from a website like
  • If you travel, sign up for fare watcher e-mail alerts and purchase your plane tickets when prices drop. is a good site for this. I got an alert the other day for a $150 RT ticket for a route that’s usually $400.
  • Shop at dollar stores for necessities like paper products, cleaning or personal care products. The savings add up over time.
  • Use coupons for basic items like toothpaste, deodorant, toilet paper and laundry detergent.
  • Limit how much you eat out or buy coffee from the coffee shop.
  • Stock up on clothes at great prices in the clearance racks at the end of each season.

What makes up a FICO score?

35% Payment History

30% Amounts Owed

15% Length of Credit History

10% New Credit

10% Credit Mix

4. I Built an Emergency Fund

No matter how hard you try to avoid new debt, if you don’t have a cushion of money set aside for unexpected expenses such as home or car repairs, vet bills or medical expenses, these things will usually end up on your credit card. This is especially important for someone with a low income or who lives paycheck to paycheck.

Make an effort to deposit at least $500 to $1000 in a savings account to be used only for emergency situations. You’ll earn a little interest and if you need to use the funds, be sure to build them back up.

Having this fund gives me peace of mind knowing that if an expense suddenly pops up, I’ll be able to pay for it without using my credit card.

As you're able to, keep building up this account as much as possible. If you have a job or other regular source of income, set up a monthly automatic deposit through your bank so you won't have to think about it.

Two good options for no-fee savings accounts are Ally Bank Savings and the Capital One 360 Savings account. Credit Unions are another place to look for a savings account with lower costs than the average bank.

Start an emergency fund in a no-fee savings account so unexpected expenses don't cause you to go into debt.
Start an emergency fund in a no-fee savings account so unexpected expenses don't cause you to go into debt. | Source

FICO Score Quiz

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5. I Pay Every Bill on Time Each Month

Since payment history comprises 35% of your FICO score, missing even one payment can have a negative impact on your score, not to mention the high late fees most companies charge.

To avoid a check payment getting delayed or lost in the mail, most companies offer online bill payment. It’s convenient and saves on postage.

If you’re someone who keeps very good track of your checking account, consider signing up for automatic payments with your creditors so you’re never late.

Also, don’t forget about smaller bills such as magazine subscriptions, products you ordered by mail or medical/dental bills. Bills like this are sometimes easy to overlook and end up going to collection agencies rather quickly. Most of the time, paying off a collection account won’t remove it from your credit report. According to NOLO, it could be stuck there for seven years or more.

Avoid this by opening all your mail and paying your bills as they come in.

Late payments can take a major toll on your credit score, so make every effort to pay all your bills on time each month.
Late payments can take a major toll on your credit score, so make every effort to pay all your bills on time each month. | Source


Experian - What are the Different Credit Scoring Ranges

MyFICO - 5 Factors That Determine a FICO Score

NOLO - How Long Does Negative Information Stay on a Credit Report?

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

© 2012 carolynkaye


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    • bodylevive profile image


      2 months ago from Alabama, USA

      I use Credit Karma, I find their site quite useful. Thank you for sharing this information as it is great to know the ins and outs of credit.

    • carolynkaye profile imageAUTHOR


      2 years ago from USA

      Thanks so much for your comments, Marie. I hope things are improving for you!

    • profile image


      2 years ago

      It will be two years in April I filed chapter 7. I have too many credit cards and I was doing well staying out of debt. Now I have run into unexpected medical costs, and I have applied for too many loans. I was at 703 now it is 667 so I need to back off using them and build up my savings.

      This article was great!!! Thanks for the wake up call! I had perfect credit my entire life until April of 2016.

    • carolynkaye profile imageAUTHOR


      3 years ago from USA

      Hi Angela, Congrats on getting a new card so soon and thanks for your comments. I'm glad you've found it helpful :)

    • profile image


      3 years ago

      Thank you for this information this has really helped me further my chances of building my credit. my BK just closed last month I went and opened a secured Credit Card with Wellsfargo.

    • carolynkaye profile imageAUTHOR


      6 years ago from USA

      You're welcome. Thanks much for your comment :)

    • NoBrainerMomma profile image


      6 years ago

      I am going through BK now and found this information helpful. Thank you.


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