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You declare bankruptcy when you do not have the money to fulfil your debt obligations. You may have to do so if you lose your job, face heavy losses in your business or become physically incapable of working for some reason. Credit bureaus then make a note of you declaring bankruptcy and then make an entry of the same in your credit report. This entry will stay in yourcedit report for about 10 years. When a bankruptcy is recorded in your credit report, your CIBIL score takes a big hit. As a result, lenders will become sceptical about giving you any kind of credit. But, you can still rebuild your credit score after going bankrupt. Read on to know 7 ways in which you can do so.

7 Ways in Which You Can Rebuild Your CIBIL Score After Bankruptcy

The ways in which you can rebuild your credit score as as follows:

  1. Avoid credit repair agencies

  2. Get a secured credit card

  3. Use your credit limit only for things that you need

  4. Review your credit report regularly

  5. Keep your credit cards active

  6. Maintain a healthy credit utilisation ratio

  7. Get a secured loan

1. Avoid Credit Repair Agencies

Seeking help from an organisation that claims to fix your credit for you may be the first option that you would want to go for, thinking that they can do the same in a short span of time. But, it is always advisable that you do not approach such companies as availing their services can prove to be an expensive affair and most of the so-called credit repair agencies are not even legitimate. Hence, we will always recommend that you go about rebuilding your credit the old-fashioned way.

2. Get a Secured Credit Card

The first step that you can take towards rebuilding your credit after filing for bankruptcy is that of getting a secured credit card. If you have a certain amount of cash in your account, you can open a fixed deposit with it with any lender in exchange for a credit card that will have the same limit as your fixed deposit amount. Once you get a secured credit card, make sure that you use it responsibly and make timely payments.

3. Use Your Credit Limit Only for Things That You Need

Another way of fixing your credit post bankruptcy is by only using the credit available to you for the things that you need. That way, you will be able to ensure that your credit utilisation ratio stays at a minimum. A low credit utilisation ratio (Under 40%) will help you increase your credit score over time.

4. Review your Credit Report Regularly

One way to fix your credit score is by frequently checking your credit information report and keeping an eye out for any inconsistencies, misprints or possible instances of identity theft. If you spot anything of that nature, we would recommend that you bring the same to CIBIL’s notice immediately and get the errors rectified or get the concerned dispute resolved. But, keep in mind that it could take up to 30 days for the credit bureau to do the needful.

5. Keep your Credit Cards Active

If you want to rebuild your credit after bankruptcy, keeping your old credit cards active even after filing the same would be another way of going about it. If you keep repaying the bills of these credit cards on time, your credit score is bound to improve with time.

6. Maintain a Healthy Credit Utilisation Ratio

The percentage of the credit available to you that has been used up is known as your credit utilisation ratio. If you have only used less than or up to 40% of the credit available to you, the lenders will consider that to be a healthy credit utilisation ratio. If you go beyond the 40% mark, the lenders will think that you are a credit hungry person and that impression of you will make them sceptical about giving you any credit. Hence, it is always advisable that you should not go overboard with your credit and only use the same to the extent that you really need it.

7. Get a Secured Loan

Getting a secured loan can also help you build your credit score over time. It is due to the fact that the ratio of your secured form of credit to the unsecured ones (which is known as your credit mix) is also taken into consideration by CIBIL while calculating your credit score. If you take up a secured loan, such as a loan against property or a loan against securities, and most importantly, make repayments towards the same amount of time, you are bound to see a gradual increase in your credit score with time. You can start with a two wheeler loan and in order to secure the same, you can make a sizable downpayment, which will make it easier for you to get the credit.

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How Long Does It Take to Rebuild Your Credit After Bankruptcy

When you file for bankruptcy, your credit score falls by a huge margin and it can end up in the realm of poor credit (below 500). As such, it could take a considerable amount of time for you to get your credit score in the ‘Good’ range, i.e. 750 or above. Experts believe that if you consistently work towards building your credit post filing for bankruptcy, it could take up to 24 months to get your credit score to the ‘Fair’ range, which is 650 or above. When your CIBIL score goes past that threshold, it will become relatively easier for you to apply for a loan, although you will get one at a high interest rate. However, you could always opt for a secured loan with a downpayment to accelerate this process. Regardless, trying to take your CIBIL score to up to 750 or even above that can prove to be a whole different ball game and it could easily take up to 3-4 years to get there, provided you work diligently towards rebuilding your credit.


Rebuilding your credit profile after filing for bankruptcy can prove to be a difficult, Herculean and time-consuming ordeal, but what you should remember is that it can be done. To do so, all you will need to do is be extremely disciplined financially and never default on any of your credit obligations again. If you would like to learn more about the factors that affect CIBIL scores, how they are calculated and how it can help you achieve financial freedom, you can do so on Bajaj Markets.

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