Bankruptcy and Your Credit Score

Your credit score is important because it can be a determining factor in whether or not you can purchase a home, obtain a credit card, or even find employment. As expected, credit scores decrease after a bankruptcy. However, understanding how long a bankruptcy stays on your record, and what options you have to increase your credit score after your bankruptcy, can help restore your financial health as soon as possible.

How Long Does Bankruptcy Stay on a Credit Report?

Your credit report includes a financial score that demonstrates your financial health. This score can rise and fall depending on your financial circumstances. Any damage done to a credit score can ultimately repaired; however, depending on the type of bankruptcy you file, your credit report may be impacted for quite some time. A bankruptcy will be listed in the public records section of your credit report. If you file for Chapter 7 bankruptcy, it is typically reported for 10 years from the filing date. If you complete a Chapter 13 bankruptcy, it is typically reported for 7 years from the filing date.

Unfortunately, bankruptcy still appears on your credit report after the bankruptcy is over, and your debts are paid off or discharged. You can take steps to ensure your financial health begins to heal after bankruptcy. You do not have to wait a full 7 or 10 years for your credit score to improve.

Tips to Rebuild Your Credit After a Bankruptcy

There is no way to avoid having bankruptcy negatively impact your credit score. However, here are a few steps you can take to ensure a bankruptcy does not impact your credit score any more than it has to.

  • Accuracy of Bankruptcy Records. There are three credit reporting agencies. After a bankruptcy, obtain a copy of your credit report from all three agencies. Study them carefully to make sure the correct amounts and creditors were listed in your bankruptcy and designated as “discharged” or “included in bankruptcy.” Any errors in your credit score can be reported and fixed.
  • Secured Credit Card. A secured credit card is one where you pre-pay an amount and then can spend up to the monetary limit you have placed on the card. A secured credit card can rebuild your credit score by demonstrating you can use credit responsibly.
  • Continue to Monitor Your Credit Reports. You are allowed one free copy of your credit report annually from all three agencies. You should check your credit score and credit report annually, at the very minimum. You can also pay for a service to monitor your credit to ensure that no fraudulent activity has occurred and adversely affected your credit.

Contact an Experienced Bankruptcy Attorney Today

If you are considering filing for bankruptcy, it is likely that choosing a Chapter 7 or Chapter 13 bankruptcy will relieve you of a lot of your financial burdens. You may have many questions about the bankruptcy process, or how your credit will be impacted. Contact the bankruptcy attorneys at Dworken & Bernstein at 440.946.7656, 216.861.4211, or online today for your free consultation. We’ll help you understand which bankruptcy would be right for you, and how it will affect your financial future.

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