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How much does bankruptcy hurt my credit score?

On Behalf of | Apr 15, 2018 | Chapter 13 Bankruptcy

Perhaps one of the most common concerns among people in Tennessee who are considering filing for bankruptcy is how severe the impact will be to their credit scores. This is an understandable concern as credit scores are evaluated in so many things today including many pre-employment hiring background checks. However, as MarketWatch indicates, while you should be prepared for an initial drop in your credit score after filing bankruptcy, you can help it improve sooner than you may think.

While many elements of a bankruptcy may remain on a credit report for seven years, your credit score can rebound well before that mark if you take the right steps. These include obtaining new credit and using it wisely. You might need to start with a secured credit card and work your way up to an unsecured one. Keeping your balances low and paying them off promptly will go a long way toward helping your score improve. 

It is also important to note that how much your credit score drops after you file for bankruptcy depends in part on the level of debt and number of credit accounts included in your bankruptcy.  Over time, as comments on your credit report that indicate items were included in bankruptcy are removed, your score will continue to improve.

This information is not intended to provide legal advice but is instead meant to give Tennessee residents an idea of how filing for bankruptcy may impact their credit scores and their future ability to restore good credit.


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