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What Happens to Your Credit Score When You File Bankruptcy

Lisett Comai-Legrand

Lisett Comai-Legrand About The Author

Oct 17, 2017 8:43:00 AM

Sometimes bankruptcy is unavoidable and really the best option. Divorce, job loss, and major health issues often contribute to the decision to file for bankruptcy. While it may feel like you cannot recover, and you may have many questions about rebuilding your credit after bankruptcy, rebuilding it is possible. It just takes patience, time, and commitment. 

What happens to your credit score when you file for bankruptcy:

When you file for bankruptcy your credit score is likely to drop between 75 to 200 points, depending upon where your credit score was at to begin with.  The new credit score will be based on how many points have been lost, the higher the score, the more points will be lost. For example if your credit score was close to 750 your new score would be close to 550, where as someone with a credit score starting closer to 550 would end up with a score around 450 after filing for bankruptcy. The chart below shows the approximate losses you can expect to see on your credit score you have at the time you file for bankruptcy. 

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Rebuilding Your Credit Score After Bankruptcy:

To rebuild your credit score after a bankruptcy it will take some time. A bankruptcy stays on your credit report for ten years. If your bankruptcy just happened, maximum points to your credit score will be lost, as the chart above shows, but overtime the impact of the bankruptcy on your credit score will be less and less. Below are a few things you can do to begin to rebuild your credit after a bankruptcy:

Most importantly, have an honest conversation with your financial institution. Tell them your story, be honest and forthright about what lead you to bankruptcy.  While you may not think it will help, they may have solutions to help get you back on track again.  You can rebuild credit after bankruptcy, but it takes time and commitment. 


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