If you are thinking of filing for Chapter 7 bankruptcy, now is a good time to consider how you can rebuild your credit. Some people may tell you that going through bankruptcy will destroy your credibility in the eyes of financial lenders. However, lending and credit options are available for people who complete Chapter 7.

To help convince lenders that you are not a financial risk, you can build back your credit through the use of loans and credit cards designed for people who have gone through bankruptcy. Nerdwallet provides some basics about these kinds of loans and how they work.

Secured loans

Credit unions and community banks are most likely to offer secured loans. Generally, these kinds of loans come in two different types. You may take out a secured loan by first depositing money into the institution offering the loan and then borrow against that deposit. The second type of loan does not involve upfront payment, but you would have to wait to receive your loan after making a set of required payments.

Secured credit cards

Many people who file for bankruptcy had struggled with credit card debt, so you may feel wary about trying to get a new card for fear that a card company will not accept your application. Fortunately, some card companies offer a secured card that sets a credit limit on it. You deposit an amount of money to back the card, and the deposit serves as the credit limit.

Secured cards are often temporary cards. They may carry higher interest than normal cards, but it can be worth it to show a card company that you can pay off your card debts. In time, a card company may grant you a regular credit card without the limitations of a secured card.

Co-signs or authorized users

If a secured loan or card does not strike you as an attractive or feasible option, you may ask a friend or relative with good credit to help you out. With the help of someone to co-sign a loan or card for you, you can get access to credit and rebuild your credit score by making debt payments.

However, a co-signer runs a risk of damaging his or her credit history by helping you out in this way. The co-signer is on the hook for debt payments that you do not pay. You might ask to become an authorized user on a credit card instead. It does not help raise your credit score as quickly, but your relative or friend may feel more comfortable going this route.