The Truth About How Bankruptcy Affects Your Credit and Credit Score
Undoubtedly bankruptcy has an impact on your credit score, but for people struggling with unforgiving debt, it might help in the long run. If you are seeking financial stability, it is important to discuss your legal options with an experienced bankruptcy attorney.
At Debt Doctors, we help people obtain financial freedom through bankruptcy. If you are unable to meet your obligations and are drowning in unpaid bills, we may be able to help you find relief. Contact our office at (414) 466-3328 to schedule a free initial consultation.
Will Filing for Bankruptcy Hurt My Credit Score?
Filing for bankruptcy will have a direct impact on your credit score. It can lower your credit score by 100 to 200 points or more and will stay on your credit report for 7 to 10 years. Just how much it will affect your credit score or cause it to drop is uncertain. Credit scoring agencies use different criteria which makes it difficult to predict exactly how much your score will be impacted.
While all of this may seem overwhelming, there is hope. For individuals with lower pre-bankruptcy credit scores, the effect of bankruptcy will be less. While you will see an initial drop, it will also help you to create a clean slate, get rid of debt, and rebuild your credit.
How Can Bankruptcy Help My Credit Score?
For some, filing for bankruptcy could actually help your credit score. In most cases, people who are filing for bankruptcy are doing so because they are unable to meet their financial obligations each month. It may be because of a job loss, an illness or injury, or other considerable change in circumstance.
Filing for bankruptcy is rarely an overnight decision and usually only comes after every other option has been exhausted. Therefore, your credit score may have already been affected by late or missed payments. If your credit score is low before you file for bankruptcy, then it will be less detrimental than if you had a high pre-bankruptcy score. The bankruptcy will allow you to get out of debt and start rebuilding your credit.
How Long Before My Credit Will Turn Around?
While many people assume that it will take 7 to 10 years for your credit score to turn around after a bankruptcy, the actual amount of time may be much less. Within a few years, you may be able to rebuild your credit with secured credit cards and credit-builder loans.
Ways to improve your credit score after bankruptcy:
- Apply for a secured credit card
- Apply for a credit builder loan
- Make payments on-time
- Use credit responsibly
- Monitor your credit report for errors
Get the help you need now. Contact the Debt Doctors to discuss your legal options.
Thinking of Filing for Bankruptcy in Missouri? Contact Our Office.
If you are thinking about filing for bankruptcy in Springfield, Missouri, contact our office at (414) 466-3328. Let us help you get the financial freedom you deserve. All consultations are free and confidential. Call now to get started.