How Bankruptcy Interacts With Your Credit Score
Your credit score can have an impact on many different areas of your life. Your ability to buy a home or rent an apartment, your access to credit to purchase a car or other items, and even your employment prospects can be affected by your credit score. It is natural for people who are in debt to question whether filing for bankruptcy will harm their credit score and prevent them from getting credit in the future.
In reality, many people who file for bankruptcy are a safer credit risk after filing than they were when they were missing payments and facing potential default or foreclosure. At the law firm of Rothschild & Ausbrooks, our attorneys help clients understand what happens after the bankruptcy process is finished and what impact that bankruptcy will have on credit. We can also inform you about what your credit score means and what a good credit score is for obtaining a loan in the future.
Many of our clients receive offers for credit cards only weeks or months after their debts are discharged and are eligible for car and home loans within a year or two of the process.
Improve Your Credit Score Following Bankruptcy
For a person who had spotless credit and a high credit score, filling for bankruptcy will likely cause a huge drop in their score. Most people who are contemplating bankruptcy, however, are already dealing with late payments, high balances, charged-off accounts and collection accounts. People struggling with debt are not likely to be maintaining a top-notch credit score in the first place.
Therefore, a bankruptcy will do far less damage to an already low credit score, and will likely help the score over the long term. To start with, your credit report is largely wiped clean when you declare bankruptcy. High balances are removed, as are any late payments or records of unpaid debts. As you start to build up more credit in the following months and years, your credit score will also rise.
Speak With Our Attorneys for a Free Bankruptcy Consultation
Please contact Rothschild & Ausbrooks, PLLC, today to get answers to questions about credit after bankruptcy.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.