If you are in the process of filing for bankruptcy, you are likely facing a substantial amount of debts that you are currently unable to pay. However, in many cases, a debtor may wonder how filing for bankruptcy will affect his or her credit score. While you may already have a low credit score due to your debts, you may be curious if the impact of a bankruptcy will limit your ability to obtain another credit card or home loan in the future. In some cases, employers will obtain credit reports prior to hiring a candidate for a job, and debtors worry that filing for bankruptcy will make it even more difficult for them to find employment in the future. Learn the answers to the most commonly asked questions regarding bankruptcy and your credit score below.
How Long Does a Bankruptcy Stay on a Credit Report?
A credit report is an important financial document that indicates the financial health of an individual. While not always completely comprehensive, a credit score compiles all of the data on a credit report and creates a number that illustrates how financially sound a particular individual is at one point in time. A Chapter 7 bankruptcy lasts for 10 years on your credit report and a Chapter 13 bankruptcy lasts for seven years on your credit report. The truth is that a bankruptcy will negatively impact your credit score as long as it stays on your credit report. However, there are ways to rebuild your credit report and your credit score following bankruptcy.
How can I Rebuild a Credit Score Following Bankruptcy?
While the truth is that a bankruptcy will lower your credit score immediately, and stay on your credit report for quite some time, there are several ways you can immediately begin to rebuild and increase your credit score following a bankruptcy.
- Check Your Credit Reports. There are a total of three different credit reporting agencies. All of their tactics to develop a credit score are quite mysterious, but they must list all documentation on their credit reports that they use to calculate the score. Always request a copy of all three credit reports at least once a year, which are free. However, if you truly want to seriously rebuild your credit score, you can pay to look at your credit report anytime, and ensure that there are no fraudulent charges, or mistakes that may occur. Any errors in your credit report can be fixed under the law.
- Secured Credit Card. A secured credit card is one in which you deposit a certain amount of money that you can then use for purchases. Secured credit cards will help you build your credit score.
Contact an Experienced Bankruptcy Attorney Today
If you are considering filing for bankruptcy, it will negatively impact your credit score, however it will give you the financial fresh start you need to ensure that you develop a strong financial future. Contact an experienced bankruptcy attorney at Lankford & Moore Law today to help you determine your next best steps and ensure your legal rights are protected.