A bankruptcy will stay on your credit report for ten years. However, if you demonstrate responsible credit habits immediately after the bankruptcy, you will greatly improve the odds of getting the credit access you need at affordable rates. A bankruptcy is certainly a negative item and it will affect your credit report but it becomes less important over time particularly if you can prove you now have good credit habits

Getting a positive item posted to your credit report is as easy as getting a personal loan from your bank. Sound like a crazy idea? Not really, all you have to do is explain to your loan officer what you are trying to do and how the bank will benefit by giving you a loan.

Now that you no longer have monthly credit card and loan payments, make it a priority to save $1000 as fast as you can. When you’ve reached that cash goal, go to the bank where you have your checking account and ask to see a loan officer. Explain to him or her that you want to get a positive item on your report and you would like to do that by taking out a $1000 personal loan and offering a $1000 Certificate of Deposit as collateral.

What you have just proposed is a no risk $1000 personal loan that the bank will earn interest on. In addition, the bank sells a $1000 Certificate of Deposit. If banks were offered these kind of deals all the time, we wouldn’t have to send tax dollars to bail them out.

What you get is an almost immediate posting of a loan on your credit report, and providing you make your payments on time, an immediate demonstration that your credit management is pointing in the right direction. Take the $1,000 from the loan and open a savings account. Use this money to pay back the loan. You will be out the cost of the loan interest but that will be offset somewhat by the interest on the CD and the savings account.

Once your $1000 loan is paid off, repeat the process and take out another loan. If you can afford the cost of the loan, keep taking them out as each will be reflected on your credit report and you will continue to demonstrate positive behavior. Also check with your banker to see if they offer secured credit card accounts. Make sure you read the terms and conditions as these cards can be loaded with fees. If it makes sense for you, get one but use it carefully and always pay on time.

A bankruptcy is a big blot on a credit record but it can be overcome. FICO scores are predictive. It looks at current behavior as well as the past record and projects the risk in the future. If you demonstrate that you are behaving responsibly, your score will improve.