Yes. About two years after discharge, most clients report that they are able to obtain a credit card with a reasonable annual fee, rate and credit limit. Indeed, some debtors have reported receiving credit card applications in the mail only months after discharge. Those early credit applications are not ideal, however. The credit limits tend to be low ($300-$500), the interest rates tend to be the highest allowed by state law and the annual fees tend to be exorbitant. But these reports demonstrate that a discharged bankruptcy debtor can get a credit card pretty quickly. If asked, we here at Bankruptcy Law Center do not recommend that our clients accept credit on such terms. But it is an individual choice that depends on many factors. It seems that alternatives, like a bank-account-link debit card, can serve the same function for matters of convenience like buying gasoline at the pump and for online shopping.

Again, the point is that discharged bankruptcy debtors are able to rebuild their credit and to obtain credit cards and other forms of credit not too long after their discharge.

The key to reacquiring the ability to obtain good credit is to act immediately, following discharge, to rebuild your credit score. Do this by regularly monitoring your credit score reported by the national reporting agencies. Start by finding out what your scores are immediately post-discharge. Then take proactive and positive financial steps that will increase your scores.

Credit reports generally contain payment data on all major financial aspects of your life including payments for utilities, phone service, membership fees and any sort of debt payments like mortgages and car payments (if you still have those post-discharge). After your discharge, it is very important to make sure that you are paying your bills on time. This is the simplest way to increase one’s credit scores and signals to future lenders that you are “credit-worthy.” One way to make this easier is to set up payments online via auto-debits. Many people already do this. Auto-debits are convenient and ensure that there are no adverse credit reporting issues caused by forgetting to write and mail a check. Obviously, sufficient funds must exist in your financial account to cover the auto-debits, so watch your bank balances carefully. Avoiding NSF charges is important. They are expensive, but also negatively impact credit scores.

While you are setting up the auto-debits, take another easy step to help improve your credit scores — set the payment date for the auto-debit a few days earlier than the due date on the bill. For example, if the payment for your electric bill is due on the 10th of the month, set the auto-debit payment for the 5th. Early payments give a big boost to credit scores. Further, if you have some extra money, another tip for increasing your credit score is to make extra payments. The size of the extra payment is not too important, but the timing is. The extra payment should not be added on top of an existing payment. Your credit score is enhanced by an extra payment that comes, say, mid-month when the regular payment is due end-of-month.

With these and other steps, debtors can reacquire their good credit rating within a couple of years after discharge.