What’s a Realistic Timeline For My Credit Score To Bounce Back After Bankruptcy?

How Does Filing For Bankruptcy Affect Your Credit Score

One of the primary concerns of many people considering filing for bankruptcy is how it will impact their credit score. The idea persists that filing for bankruptcy in Glendale will devastate your credit, which many people think will make it impossible for them to buy a house or a car for many years to come.

Unfortunately, that’s just not the reality – but the persisting myth keeps many people from getting the debt relief they need through bankruptcy. If you file for bankruptcy, it will affect your credit score, but you’ll ultimately end up on much better financial footing as a result.

Things That Affect Your Credit Score

There are many factors that affect your credit score, and getting an understanding of these things can help you gauge the effect that Avondale bankruptcy will have on your score and what you can do later to improve it. Your score will be primarily influenced by the amount and type of credit you have and how long you have had it. The longer you have had credit, the better your score will be (and the faster it will recover from setbacks). So, if you have had a long and positive credit history before you file for bankruptcy, chances are good that you’ll bounce back faster.

Timely payments will positively affect your score, while late payments and delinquencies will negatively affect it. Having too many inquiries, or credit applications, will also negatively affect your credit. Therefore, you may end up doing more harm to your credit by delaying filing for bankruptcy because you may continue to struggle paying your debt, ending up with a lot of late payments and missed payments. You may also end up with a lot of inquiries if you try to open new lines of credit to pay off the ones you currently have.

How Bankruptcy Affects Your Score

Bankruptcy is definitely a black mark on your credit history. However, what kind of affect it will have depends on what your credit was like prior to filing. If you were struggling with excessive debt, late payments, and missed payments for a long time, chances are good that your credit is pretty bad. Filing for bankruptcy can actually improve your score in cases like that because it puts a stop to those other negatives.

Typically, bankruptcy stays on your credit report for seven to 10 years. However, it tends to fall into the background as time goes on, having less and less impact.

What You Can Do After Bankruptcy

How long bankruptcy makes it difficult for you to get new credit will depend a lot on what you do after your bankruptcy is discharged. In most cases, you can start getting new credits in a year, and you can qualify for some home loans and car loans in two years.

The best thing you can do for your credit is to make a budget and stick to it. You always want to be able to pay all your bills on time (barring any unforeseen financial circumstances, of course). Save what you can to use as collateral for a secured credit card and to cover yourself in case of any financial emergency. Then apply for small lines of credit through store credit cards or gas credit cards. The threshold for approval on these is lower, and if you can get one and start spending small amounts on it, you will quickly start rehabbing your credit score.

Keep an eye on your applications though! Too many inquiries can also bring down your credit. Apply for one card, and if you’re rejected, give it at least another month before you apply for anything again.

Hire a Trusted Bankruptcy Attorney In Avondale

If you are struggling with debt, do not let fears about what it will do to your credit score keep you from getting the relief that bankruptcy offers. Talk with a bankruptcy attorney to explore your options. Call My AZ Lawyers today to talk with a bankruptcy lawyer about how Chapter 7 bankruptcy or Chapter 13 bankruptcy may help you. One of our attorneys will review your finances and help you understand which option will benefit you most. Our goal is to help you get the maximum debt relief possible under the law. We represent clients in Phoenix, Tucson, Glendale, and Mesa. Contact us today to schedule a free consultation with a bankruptcy lawyer and learn more.