One of the most common bankruptcy questions is whether filing bankruptcy will destroy a person’s credit score.
And it’s no wonder—it’s hard to make any major purchase without decent credit.
The truth is that filing bankruptcy does show up on your credit report for a period following your filing, but it certainly doesn’t have to ruin credit.
In fact, filing bankruptcy has been known to even help credit in the long run in some cases.
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The good news is that a bankruptcy filing doesn’t stay on your credit report for eternity.
This doesn’t mean you won’t be able to get any credit during that time period, but it will likely be more difficult to find lenders or find great interest rates.
So, then next question is: If a bankruptcy filing stays on my credit report for some time after I file, what does that mean to my credit?
The answer varies person to person, but in general, after bankruptcy it may be more difficult to obtain new credit cards or receive new lines of credit.
However, when you think about it, how strong was your credit before you filed bankruptcy?
Chances are it probably wasn’t great to begin with.
But after filing bankruptcy, you are likely moving up toward better credit rather than being weighed down by old bills on that credit report.
The reality is that you can rebuild your credit after bankruptcy and create an even stronger credit score for your future.
After filing bankruptcy, many people feel empowered because their future is their own hands and not their creditors.
Right after your bankruptcy, it’s important to start rebuilding your credit.
This is done by paying your bills on time each month, like your rent, mortgage and utility bills.
It’s also done by having a credit card and paying it each month.
Although you may not get the credit card of your choosing right after you file bankruptcy, you still want a credit card to show the credit reporting agencies that you can be a responsible credit user.
Oftentimes, people establish credit by getting credit cards and charging a little each month to necessities they would normally pay for with cash. Then, once the bill comes, they pay more than the minimum payment or they pay it off each month.
Remember, the key to rebuilding credit after bankruptcy is not to wait for your bankruptcy filing to be removed from your credit report, but to responsibility use credit to prove yourself as a creditor.
If you’re considering filing bankruptcy, it may help to talk to a bankruptcy attorney about your options and ask him or her how filing bankruptcy may affect your credit.
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