How to Easily Rebuild and Repair Your Credit After Bankruptcy, Foreclosure, or Repossession


Most credit repair scams and schemes and just a worthless waste of money and don’t help you to legally rebuild your credit.

Here is a simple process I have advised people to use for years that does the trick for rebuilding and restoring your credit from any credit disaster.

This isn’t some crafty or quasi-legal technique. This is just using the credit reporting system wisely and to your advantage to rebuild your credit in a relatively short period of time.

Step 1 – Get a Copy of Your Consolidated Credit Report

Get a copy of your consolidated credit report. It is the type of report that includes all the major three credit reports in one report. I only use a consolidated credit report to check my credit and the link will take you to the credit report I use.

Your credit report is like a report card of sorts. You need to look it over and make sure that all the accounts listed on your credit report are yours. If they were not, you need to write to the credit bureaus that are reporting them and tell them they are not your and ask to have them removed. It’s like you looked at your school report card and it listed classes you did not take. They should not be there.

If the rest of the accounts belonged to you but you had a bad track record with them, that information stays on the report just as if you got a D in a class you took. Just because you got a bad grade does not mean the class is removed from a report card.

After seven years the bad credit items will no longer be reported on your credit report. When you look at your consolidated credit report if any of them list negative information longer than the seven year period, then when you write to the credit bureaus to point out any incorrect information, you can tell them about the old items.

Generally the credit bureaus are good about automatically removing the old items.

While you are at it, look for any delinquent accounts that may be younger than seven years old. If you have any, pay them off. The contact information for the creditor will be on your credit report.

Step 2 – Boosting Your Credit Score With Good Credit Using a Secured Card

Using the report card analogy, if you wanted to bring up your GPA you would need to earn some better grades to do it. It is the same with your credit report. If you want to bring your score up you need to start having new and good credit reported about you.

The best way to do this is to get and use a secured credit card. In fact get two different ones. I put together a section of the site that lists reviews for secured cards. Look at the secured cards here.

The advantage of getting a secured card is that you will get the credit card and not get a rejection on your credit report that will further hurt your credit. A rejection can be easily spotted by looking at the inquiry section of your credit report and seeing there is not a corresponding card opened. And with your current bad credit, if you applied for an unsecured card, you would get rejected.

The reason you will get the secured credit card on the first attempt is because you need to put up a deposit with the bank that is equal to your credit limit. The deposit will earn you interest and in the unfortunate event you were unable to pay your card and defaulted, the bank would use your deposit to pay the debt.

When looking for a secured card you want one that will report to all three credit bureaus. This is key. We need your new good payment history reported.

Now when I say use the card, you do not need to carry a balance from month to month. Just use the card for regular purchases and pay the card off either immediately or at the end of the month.

It is also important to make sure your secured cards has to a line of credit above $1,000. A lower credit line card will count much less towards boosting your credit score. To increase your line of credit, it may require you to put down an additional deposit.

Also, if you get a secured card with a $300 limit, never have more than 35% of the limit on the card. Even though your initial limits may be low, you don’t want to max them out. You can always increase your limits by increasing your deposits. You can increase your credit limit by increasing your deposit with the card company.

I suggest getting more than one card so you can get as much good juice flowing to your credit report without having too many credit cards open. You could actually go with three if you wanted to, but no more than that.

Just make sure the card will report to the credit bureaus.

To Find Secured Cards, Click Here.

Step 3 – Enjoy Your New Legally Rebuilt Credit

If you follow these steps now in a year you’ll feel better about yourself and you’ll have substantially better credit.

After following these step it will take a year or so to get you up to the awesome credit score you are looking for.

I would suggest you also keeps tabs on your credit score using the free service from Credit Karma. It will let know know when your score rises along the way.

To keep your score growing just make all your future payments on time and avoid defaulting again.

Many people who have lived through a period of bad credit are often credit shy, me included. For them, credit equals pain. So what they do is avoid getting any new credit. But this only prevents them from bringing up their grade point average.

This should do the trick for you.

How to Easily Rebuild and Repair Your Credit After Bankruptcy, Foreclosure, or Repossession
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FREE – How to Get Out of Debt Guides

Below you will find many of free guides and articles that address specific issues about debt and getting out of debt. But before you head off to those posts I’d like to invite you to read How Do I Get Out of Debt Quickly? Change Your Mindset. It is a very important post that addresses how to have the right mindset to best tackle your situation.

Important General Get Out of Debt Advice

Bankruptcy Articles and Posts You Must Read

To get ready to read the information below with the right frame of mind, please first read How Do I Get Out of Debt Quickly? Change Your Mindset.

Bankruptcy Advice

Life After Bankruptcy

Budgets and Budgeting

Calculators and Tests

Credit Counseling

Credit Score / Credit Repair Advice

Debt Collector Help

Debt Consolidation Loans

Debt Relief Program Issues or Problems

Debt Settlement Advice

Identity Theft Advice

Life After Debt

Mortgage Help

Be sure to first read How Not to Get Scammed by a Mortgage Loan Modification Company.

Debt-to-Income Calculator

First you’ll need to determine your current debt-to-income ratio. The target debt-to-income ratio under the Home Affordable Modification program is 31%. Use this free online DTI calculator.

Mortgage Modification Calculator

The mortgage modification eligibility calculator will ask you several questions and then show you which programs you may be eligible for.

The free mortgage modification calculator can be found here.

Free Mortgage Modification Help and Counseling

If you have questions about the process or eligibility you can call 888-995-4673 and get connected with an mortgage modification adviser for free. This help is provided by government subsidized HUD Housing Counselors and they can be a big help in navigating the modification process.

In order to assist you, the housing expert will need to gather some information from you. Have the following documents handy:

  • Information about your first mortgage, such as your monthly mortgage statement.
  • Information about any second mortgage or home equity line of credit on the house.
  • Information about the monthly gross (before tax) income of all household members contributing to pay the mortgage, including recent pay stubs if you receive them or documentation of income you receive from other sources.
  • Information about your savings and other assets.
  • Account balances and minimum monthly payments due on all of your credit cards.
  • Account balances and monthly payments on all your other debts such as student loans and car loans.
  • Your most recent income tax return.
  • It may also be helpful to have: A letter describing any circumstances that caused your income to be reduced or expenses to be increased (job loss, divorce, illness, etc.), if applicable.

You can also get free help and housing counseling from a local HUD approved counselor. You can find your local free housing counselor, here.

Contact Your Mortgage Company

Not sure if your mortgage company offers modification programs? Not all do. You can contact your mortgage company to ask them about mortgage modification programs you might be eligible for. Click here to find your mortgage company.

NPV Calculator

Want to know the net present value (NPV) of your home for the mortgage modification process? No problem, use the free NPV calculator to find out. The NPV calculator is right here.

The calculator can be used by homeowners who have been denied a HAMP modification because of their NPV result or can also be used by homeowners prior to applying for a HAMP modification to help them better understand the NPV evaluation.

No Advance Fees

The Federal Trade Commission has a Mortgage Assistance Relief Services Rule which prohibits advance fees for mortgage rescue services or mortgage modification help.

Repossession Advice

Saving Money

Student Loan Resources

You can use the following student loan resources to help reorganize, discharge or forgive your student loan payments.

The Overall Guide to Dealing With Student Loan Debt

Discharge Your Student Loans in Bankruptcy

Student Loan Forgiveness and Discharge Information

Student Loan Consolidation Information

Specific Federal Student Loan Repayment Program Information

Maybe College Isn’t the Answer

How to Easily Rebuild and Repair Your Credit After Bankruptcy, Foreclosure, or Repossession
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  • Emily

    My husband and I have been trying to repair his credit after a repossession which resulted in a settlement. We have had a credit card for 8 months now and have never had a monthly balance on it. We usually just pay it using an app right after we use it. This seemed to have helped his credit by a few points, but the last time FICO reported he had lost 10 credit points! When I inquired as to why, it’s because our credit usage increased from 10% of the credit limit to 25%. Never a late or missed payment, and not anywhere near our credit limit and we lost 10 points. Can I fight this? How is that fair? We have been very diligent and careful with the card. 8 months, $6,000 and not a penny of interest. And we STILL lost 10 points! We feel so hopeless sometimes!

    • http://GetOutOfDebt.org Steve Rhode

      What other unresolved negative items are on the credit report and have you looked at a consolidated credit report or just a one bureau report?

      • Emily

        I have pulled all three credit reports. Nothing unresolved. There were some late payments to credit card accounts but those were paid off in full, no settlements. Then of course the repossession was a settlement of less than what was owed. I have pulled all 3 reports and they are consistent with eachother.

      • http://GetOutOfDebt.org Steve Rhode

        How many open and unsecured lines of credit do you have reporting now and how old are those accounts?

  • http://www.facebook.com/tari.pollo Tari Pollo

    I have talked to a few places to fix my credit. Some of them seem a bit inexperienced and some want me to do things that make me feel uncomfortable like pay a fee upfront, or do something fraudulent with my identity. Personally, I feel most confortable with a place like Lexington Law because they have a really good reputation and have actual lawyers working on their team.

  • http://www.facebook.com/theoccampbell Theo Campbell

    Avoid CapitalOne, They place a hard inquiry on your credit for their Secure card. Just tried them, and lost 6 points over them
    i would Recommend First Premier Card, They a bit pricy, but It’s super easy to get, and will boost your credit greatly. and the Deposit is only 33% of the Card limit.
    Just watch out for charges.

  • http://www.24hourpaydayloans.me.uk/ Kate Jacobson

    Only using 35% of the limit on any given card is good advice which I have heard elsewhere in relation to taking the right steps to improving your credit score. It seems logical really.

  • Lorraine

    I tried getting a secured credit card through Wells Fargo, and weeks later I got something in the mail saying that I’ve been rejected. I don’t really understand the process of getting a secured credit card. I thought that as long as you’re willing to put down a deposit, you’ll be able to obtain a card with whatever the deposit was. I was so confused and upset that I stopped trying to get one. :(

    • http://GetOutOfDebt.org Steve Rhode

      A bit perplexing indeed. Did the rejection letter state a reason why?

  • Inickels19

    Very helpful and great suggest. You should write a series if you have not already. 

  • Anonymous

    Great pic!