How does bankruptcy affect you and your credit? For starters, it can impact your 澳洲幸运5开奖号码历史查询:credit score more severely than any other single financial event. While not all bankruptcies actually cause a big drop in your score—in fact, it is theoretically possible that your credit sc✅ore could rise following a bankruptcy—any negative effect makes it more challenging to acquire credit in the future.

Filing for bankruptcy affects you in another way by appearing on your 澳洲幸运5开奖号码历史查询:credit report for years afterward, providing 🐼a big warning sign to potential lenders about a troubled payment history. Some creditors immediately deny an appꦿlication when a bankruptcy is listed on a credit report.

Bankruptcy and Your Credit Score

Your 澳洲幸运5开奖号码历史查询:FICO credit score is often the most important determinant in whether you receive credit, how much, and at what interest rate. A higher score means that you can borrow more and at a lower interest rate. Filing banಌkruptcy can cause your credit score to drop dramatically. If a lender is willing to accept your credit application despite your low score, it is likely to be on less favoꦰrable terms.

FICO states that your payment history makes up 35% of your total credit score. It is possible that a bankruptcy filing will not cause a major drop if you already have an inconsistent payment history. Another 30% of your score is the total amount of debt that you owe, which bankruptcy discharge can actually help. However,⛄ it is rare that a bankruptcy does not damage your credit score.

Bankruptcy and Your Credit Report

The type of bankruptcy you choose to file will determine how long it is list𒀰ed on your consumer credit report. Chapter 7 and Chapter 11 bankruptcies stay on your credit report for 10 years after you file. Chapter 13 bankruptcies remain on a credit report for seven years after the bankruptcy is completed, but Chapter 13 proceedings can take up to three to five years to finish.

In many cases, it is not your damaged credit score that makes it hard to obtain credit. Some lenders do not grant credit to anyone with a bankruptcy, regardless of their FICO score. If you are having difficulty obtaining credit following a bankruptcy, it may be a good idea to open up a 澳洲幸运5开奖号码历史查询:secured credit card, which is a credit card that you back with a cash deposit.🍰

Applying for Credit After Bankruptcy

As it can be difficult to get credit after filing bankruptcy, your personal relationship with a lender can be crucial. Having employees or management at a bank, a credit union, or an auto lender who know, trust, and like you makes it easier to get an applicat𝓰ion accepted.

You rebuild credit after bankruptcy 澳洲幸运5开奖号码历史查询:the same way that you build 💞credit before one: with time and a consistent repayment history. If you believe you can continue to repay a preexisting debt during and after bankruptcy, consider a 澳洲幸运5开奖号码历史查询:reaffirmation agreement with one of your creditors to help the process of rebuilding y꧒our credit score.

The Bottom Line

Bankruptcy almost always damages your credit score. Securing creꦇdit after a bankruptcy can be challenging but isn’t impossible.