• Filing for Chapter 7 bankruptcy protection gives consumers a fresh start financially. A Chapter 7 case discharges the qualified debts owed by an individual and frees up funds to get back on her feet. The credit report of a consumer will take a hit after filing for bankruptcy; however, rebuilding a positive credit report and score is possible.
  
  

Dispute Inaccurate Information

• The Fair Credit Reporting Act gives consumers the right to dispute incorrect information that is listed on a credit report. The credit bureaus are responsible for providing correct information on the reports and must correct both inaccurate and incomplete information if a consumer brings it to their attention. For example, if an account that was included in a bankruptcy filing is still showing as open under the original lender with late payments after the filing, the credit bureau must update the account to show that it is included in bankruptcy. This will begin the recovery process as the accounts will age and no additional negative information will be posted by the original lender.
  
  

Add New Accounts

• While it may be difficult to open new accounts immediately after bankruptcy, obtaining new credit and managing it correctly will lead to an increase in credit score. Consumers may consider opening a secured credit card that is secured by funds placed in a savings account. If the consumer defaults, the lender will keep the funds to repay the debt obligations; however, if the consumer keeps a positive payment history, the lender can eventually convert the card to an unsecured account and return the original security deposit to the consumer. As a positive payment history is established, consumers will qualify for more credit products at attractive interest rates.
  
  

Establish a Budget

• Although it will not have an immediate effect on a credit report, establishing a budget can help repair the damage done before the bankruptcy filing. Establishing a budget allows consumers to learn to live within their means, which can keep them from continuing to get in over their heads with debt obligations. This can also allow a consumer to establish a savings account dedicated to emergencies, giving them an option other than using a credit card to pay for unexpected expenses. Living on a budget will also allow consumers to pay monthly payment obligations on time, as the payments are already built into the income and expenses. This will increase a credit score over time as positive payment history posts to the report.