After you are finished with your bankruptcy proceedings, you must anticipate that your credit score will be significantly lowered. With this, it may take a while to build back up. Follow along to find out what your score will be after bankruptcy and how a proficient Rockland County bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq. can help you through this difficult time.
What Will My Credit Score Start at After Bankruptcy?
If you are worried about filing for bankruptcy and the impact it will have on your credit score, it’s important to understand where you can expect your score to start after filing. Unfortunately, how much your credit score changes depends on a number of factors.
How Much Your Score Drops Depends on Pre-Bankruptcy Score
According to FICO, one of the leading credit score companies, you’ll find that the higher your credit score is, the more your score will drop. That’s because it is a larger risk signal to lenders. As such, you can expect the following drop based on your credit score prior to filing:
- Score of around 680 points: 130-150 point drop
- Score of around 780 points: 200-240 point drop
Factors That Determine Your Starting Score
It’s important to understand that there is no specific calculation for determining what your credit score will start as after bankruptcy. Rather, several factors will play a hand in this, such as the following:
- The number of accounts you have open before and after your bankruptcy filing
- The amount of debt you claimed in your bankruptcy filing
- Whether you filed for a discharged or non-discharged Chapter 13 bankruptcy, or otherwise a Chapter 7 bankruptcy
- How long bankruptcy remains on your report and the discharge status
How Long Will Bankruptcy Affect Credit?
Unfortunately, a bankruptcy case will remain on your credit report for a considerable amount of time. This is because it is one of the most considerable signals to lenders that indicates your inability to repay loans.
You should note, however, that while your bankruptcy filing will remain on your credit report for a considerable period, you can work to improve your credit while the filing is listed. However, you likely will not see pre-filing credit scores until bankruptcy falls off your credit report.
Chapter 7 Reporting Duration
If you file Chapter 7 bankruptcy in Rockland County, you can expect this to remain on your credit report for 10 years.
Chapter 13 Reporting Duration
A Chapter 13 filing will remain on your credit report for 7 years from the date you filed if debts were discharged, and 10 years if your case was not discharged.
How Soon Can My Credit Score Improve?
As mentioned, you can improve your credit, even with a bankruptcy filing on your credit report. While improvement varies by the type of bankruptcy you filed and your specific circumstances, you’ll find that it takes anywhere from 1 month to 2 years before you can see visible improvement to your credit, as improvement takes consistency and responsibility.
What Can I Do to Improve My Credit Score?
After bankruptcy, implementing measures to help improve your credit is critical. Your credit score dictates a considerable portion of your life as a consumer, so taking the steps to focus on rebuilding your score post-bankruptcy is imperative. While you will learn a number of tips to help you stay on track during the mandatory debtor education course, you should also consider the following:
Consider a Secured Credit Card
Once you have recovered from your bankruptcy proceedings, it may be in your best interest to request a secured credit card. Usually, you may open a secured credit card through a cash deposit or a personal loan. This card can be used to make small essential purchases that you will be easily able to keep up with to help build a positive payment history.
Maintain Low Balances
Additionally, if you have any other credit cards still open, you should work toward keeping your credit utilization under 30%. This shows that you are not making purchases you cannot afford to pay upfront, and reduces the risk of falling back into debt.
Monitor Your Credit
Finally, you should regularly check your credit reports to ensure that the information sent to the reporting bureaus is accurate. Unfortunately, clerical errors or fraudulent reporting can hurt your score, especially when left unchecked, so learning what to look for and how to dispute erroneous information is critical.
Work With Our Experienced Rockland County Bankruptcy Team
Hopefully, by following these steps, you may be able to see an improvement in your credit score if you’ve completed your bankruptcy filing. At the Law Offices of Allen A. Kolber, Esq., we understand just how difficult the bankruptcy process can be, and having to deal with your credit score afterward makes it all the more stressful. This is why we recommend that you contact our talented Rockland County bankruptcy law firm as soon as possible. We look forward to collaborating with you.
