People frequently have the misconception that bankruptcy is the end of their financial road, and that any possibility for future financial success is removed. As a result, we commonly receive questions about the best ways to move forward after bankruptcy, specifically, “How long does bankruptcy stay on your credit report?” While bankruptcy does have an impact on an individual’s credit report and score, it doesn’t last forever, and it is possible to move on and rebuild after the bankruptcy process. To help alleviate any concerns you may have, we’ll explore what happens to your credit score after bankruptcy, how long a bankruptcy stays on your credit report, and outline a few practical tips for a fresh financial start.
Your Credit Report Determines Your Credit Score
Credit scores are generated based on available information on your credit report, which means that a bankruptcy will affect your credit score as long as it still appears on your report. Once a bankruptcy is completely removed from your report, you will begin seeing improvement in your score. Chapter 7 and chapter 13 are the two categories of bankruptcies that consumers can file, and each stays on your credit report for a slightly different duration.
How Long Chapter 7 Bankruptcy Stays on Your Credit Report
Chapter 7 bankruptcy remains on your credit report for 10 years. After this time, the bankruptcy and any related accounts will be removed automatically.
How Long Chapter 13 Bankruptcy Stays on Your Credit Report
Chapter 13 bankruptcy should disappear from your credit report after 7 years. Because you agree to a 3 to 5-year repayment plan as a part of chapter 13 bankruptcy, accounts that were delinquent before the official bankruptcy filing may be removed from your credit report sooner than 7 years.
Rebuilding Your Credit Score After Bankruptcy
Just because bankruptcy stays on your credit report for a number of years does not mean you cannot immediately start taking steps towards rebuilding your credit. Clients have many options to start rebuilding their credit score after bankruptcy, including:
- Using a Secured Credit Card: Secured credit cards are great options because they work by allowing you to deposit a specific amount of money into a bank account that serves as your credit limit. This allows you to build credit while paying down debts quickly.
- Sticking to a Monthly Budget: By focusing on building a monthly budget, monitoring spending habits, and paying bills on time, it is possible to have excellent credit again in the future.
- Following Up on Your Credit Report: Once the 7 or 10-year time span has passed, it’s also important to check your credit reports to make sure the bankruptcies have been removed, and the correct accounts have been reported as discharged.
Credit Rebuilding from Parker & DuFresne
At Parker & DuFresne, we believe there is life after bankruptcy. Our goal is to get clients in Jacksonville, FL and the surrounding areas back on financial track as quickly as possible, which is why we offer our clients a free credit rebuilding program. This program is valued at over $1,000, and has helped our clients restore their credit in just 12-24 months after bankruptcy. Our credit rebuilding program is specifically tailored for our post-bankruptcy clients. By completing it, you’ll learn how to:
- Avoid credit repair scams
- Replace old credit with better credit entries
- Build credit using low credit lines
- Update your credit score information with reporting bureaus
- Fix errors on your credit report
We want to give you the knowledge, tools, and motivation to rebuild your financial future. If you are considering bankruptcy, and would like more information on how long bankruptcy stays on your credit report, and how it will affect your credit score, contact our offices today.