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How to fix your credit score after personal bankruptcy

On Behalf of | Feb 8, 2023 | Chapter 7 Bankruptcy

Filing for bankruptcy is, without a doubt, a difficult decision to make. While it can help you turn over a new leaf (financially speaking), it can also leave you with a stained credit score. Thus, after declaring bankruptcy, you need to figure out how you will rebuild your credit.

Depending on the type, bankruptcy can remain on your credit report for 7 to 10 years. During this period, bankruptcy will hurt your credit and ability to obtain credit. So how do you repair your credit after declaring bankruptcy?

Here are two steps you can take to improve your post-bankruptcy credit rating.

Keep an eye on your credit reports

Like most things in life, credit reports are never perfect. According to a Federal Trade Commission survey, one in four consumers reported identifying errors on their credit reports. These errors can include account reporting mistakes, wrong personal information or incorrect accounts. These errors can greatly impact your credit score. By routinely monitoring your credit reports, you will be able to identify and dispute errors that can potentially hurt your score in the long run.

Understand what you are losing

After a successful bankruptcy petition, you will either be clearing off your debts or coming up with a repayment plan that you can afford. But bankruptcy can also wipe out some good stuff. While calculating your credit score, certain types of accounts as well as the specific number of accounts, will come into play.

Let’s face it –bankruptcy is an important option when you are caught up in debt. However, it is almost impossible that bankruptcy will leave your credit unscathed. Knowing your options, however, can help you rebuild your credit and get back on your after bankruptcy.