Having a bankruptcy can negatively affect your credit score. According to your FICO, it can lower your score up to 150-240 points depending on where it began at. This one event can drop your credit score several categories lower than what you started with which can play a critical role in determining how your credit looks.
This one single event can cause you to not be able to be eligible for future loans or credit cards. Below, we will be going over some details on credit and how you can remove a bankruptcy from your credit report and how long bankruptcy would affect your credit score.
How Long Does It Stay?
The length of time that you can expect to see a bankruptcy on your credit report is ultimately going to depend on what kind of bankruptcy you filed for.
For instance, a Chapter 7 bankruptcy will effectively stay on your credit report for 10 years. At the same time, a Chapter 13 bankruptcy will stay on your report a period of only 7 years.
With that being said, unlike what is typically reported, a bankruptcy can be removed from your credit report earlier and you can get credit after you file for one. The truth is, you do not have to wait for the full 7 to 10 years to use your credit again and get a loan, mortgage, or credit card.
Luckily, it actually only takes a couple of years for some people to be able to access their credit again. While this might seem like a fairly long time, it is a very short period of time compared to popular belief.
With that being said, once you do begin to qualify again, you are going to be paying the same high-interest rates that you were likely paying previously. By helping to reestablish and rebuild your credit before applying again, you should be able to get much better offers from credit agencies.
How Can I Rebuild?
The biggest thing that you are going to want to do after you file for bankruptcy is work to rebuild your credit. The best way to do this is by getting it completely removed from your credit report as soon as possible. Along with this, you want to learn what caused the bankruptcy to begin with and figure out some ways you can avoid letting it happen again.
You want to be sure that you have a full plan in place to pay all of your bills on time. Ultimately, your payment history is going to account for the largest portion of your score. Just one single late payment can cause a significant decrease in your overall credit score.
Therefore, you want to be sure that you are working to pay off all of your bills as soon as possible.
Overall, there are a lot of different things that you are going to want to do after you file for bankruptcy. You can get the bankruptcy removed by hiring or enlisting the help of a credit repair agencies as they have the experience necessary to get bankruptcies completely deleted from your reports.