Certified Bankruptcy Specialist
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What Happens to My Credit Score After Bankruptcy?

One of the top concerns of prospective bankruptcy filers is what will happen to their credit score after the bankruptcy is over. The myth is that after completing the bankruptcy, the filer’s credit score will plummet beyond repair with no hope of a normal rating. This is simply untrue. This piece will explain just what happens to your credit score when you file bankruptcy, as well as providing some ways to raise it once you gain a discharge.

The Type of Bankruptcy You File For

Although a drop in credit score may seem universal for all chapters, it will actually vary depending on which chapter you end up pursuing.

If you file under Chapter 7, you will be able to see your credit score 90-120 days after you receive a discharge. The initial dip in credit scores after this chapter tends to be around 100 points, and scores will usually sit around 500-550 for most filers.

Chapter 13 filers will also see a decrease in their score, though not as severe as that of a Chapter 7 bankruptcy. After you have completed your payment plan that spans a 3-5 year period, you will also be able to check your credit score after 90-120 days.

Time Is On Your Side

The most important aspect to keep in mind after filing for bankruptcy is that time will always be on your side. Positive changes in your credit score will seem few and far between in the beginning, but it does not mean it will be like that forever. As long as you are able to maintain on-time payments you will be able to see an increase in score, and creditors/lenders will be more willing to work with you.

Here are some credit score statistics to keep in mind after filing for bankruptcy:

  • Within one year of filing bankruptcy, 43% of filers had a credit score of 640 or higher
  • Within two years of filing, 65% of filers had a score above 640

Raising your credit score after bankruptcy is absolutely possible, but the key to doing so is putting in place good financial habits along the way.

Instilling Good Habits

There are some habits that you can put in place immediately after bankruptcy that can help boost your credit score and keep it from going down again.

  • Don’t be too quick to borrow money. Do your best to focus on making your payments on time for existing loans and credit cards to rebuild your credit. This is one of the easiest methods.
  • Open a secured credit card account. These are available to almost every recent bankruptcy filer to help raise their credit score when responsibly used and properly paid off.
  • Car financing. Both Chapter 7 and 13 filers may be able to finance a car during and after bankruptcy, and staying consistent with payments is the best way to keep your credit score on the rise.

Contact Our California Bankruptcy Team Today

It’s true that there is no quick fix to raising your credit score. This being said, there is still nothing to fear when filing bankruptcy with an experienced team on your side. With personalized and compassionate services, we can help you create a plan that works best for you and minimize the impact on your credit as much as possible.

To find out more about how we can help you, contact us today through our website or give us a call at (310) 846-8454 for a free consultation!