Re-establish Credit After Bankruptcy?

Should you re-establish credit after bankruptcy? NO! Dave explains why.

QUESTION: A listener asks how to re-establish credit after bankruptcy.

ANSWER: Don’t!  Credit is what caused your bankruptcy.  Why would you want to go right back into that? 

Get on a written budget, save up and pay for whatever you want from now on.  No more buying on credit.  You don’t need to go buy a car, a house, or anything else right now.  You need to build up your emergency fund and get control of your money over the next couple years. 

If someone looks at your credit report and sees that you borrowed again after your bankruptcy, they’ll think you’re an idiot.  One of the best things your credit report can show is no borrowing after your bankruptcy.  Three years down the road that will show a mortgage lender that you learned your lesson.

Don’t re-establish credit after bankruptcy.