If you have been struggling with debt for an extended period, you may be considering filing for bankruptcy. And while this can provide you with the immediate debt relief you need, it may also raise additional questions, including if it will ruin your credit score. If you are concerned about how your bankruptcy filing could affect your credit profile, bankruptcy attorneys can provide you with the advice and answers you need so you can rebuild your creditworthiness and fortify your finances.
At CMC Law, our bankruptcy attorneys will use their specialized knowledge and years of experience to help you achieve and maintain a debt-free lifestyle.
Will Filing for Bankruptcy Affect Your Credit Score?
According to bankruptcy attorneys, how a bankruptcy filing will affect your credit score is dependent on the score itself. In general, you can expect this to cause your credit score to drop around 200 points. So, if you have a score of 650 or above, be prepared for your credit score to decrease.
If your current credit score is in the 400-500 range, filing for bankruptcy can help and may cause your credit score to increase by up to 50 points. So, in situations where you are grappling with significant debt and struggle with a lower credit score, your bankruptcy attorney will highly encourage you to file to resolve both issues.
How Filing for Bankruptcy Impacts Your Credit Report
When working with bankruptcy attorneys, they will prepare you for how your bankruptcy filing will affect your credit report. How long the filing will be reflected on your report is determined by the type of bankruptcy you file. When filing for Chapter 13 bankruptcy, you can expect your bankruptcy to be on your credit report for seven years. If you file or Chapter 7 bankruptcy, your filing will remain on your credit report for ten years. And while this may make you feel discouraged, there are steps you can take to help strengthen you report and credit score.
How to Rebuild Your Credit Score After Filing for Bankruptcy
Bankruptcy attorneys will advise you to take the following actions to improve your creditworthiness.
- Monitor your credit score and reports. It is essential that you routinely review your credit reports. To do this, pull your reports from Equifax, Experian, and TransUnion every few months. Look over each one, as they may have different information amongst them. When doing this, be sure to keep an eye out for any inaccuracies that could be harming your score, including expired credit cards or debts. If you do find misinformation, contact the credit bureau directly to have these removed from your reports. To learn additional information about debt and event limits on credit reports, consult your bankruptcy attorney.
- Open a secured line of credit. Bankruptcy attorneys will recommend that you get a secured or prepaid credit card rebuild your credit score after your bankruptcy filing. Only use this card for small purchases that you can pay off in full and on time (or sooner) every month. This will help you improve your credit score. Research Credit Karma to determine which secured credit card will be right for you.
- Make timely payments. The best way to enhance your credit score is to pay your bills on time. If you can, pay them as soon as they are due.
The Bankruptcy Attorneys at CMC Law Can Help You Rebuild Your Credit Score
While rebuilding your credit score may feel daunting and overwhelming, it is a gradual process that requires patience and diligence. That is why the bankruptcy attorneys at CMC Law will utilize their skills and compassion to help you strengthen your credit report and set you up for future success.
Contact us today to schedule a free consultation. At CMC Law, we will use our best-in-class customer service to help you feel confident in every choice you make.