Are you looking into how to file for personal bankruptcy? Have you ever considered how it will effect your credit score? In this article I am going to cover what will happen to your credit score after filing bankruptcy and give you a few things to help you get it back on track.
Life after bankruptcy discharge is not pretty. Once you have received your bankruptcy discharge paperwork your credit score will drop below a 550. This is usually the bottom of the barrel when it comes to credit scores.
In order to get even a mortgage loan you will need at least a 620 or higher. This will leave you high and dry for taking any type of loan out for a home, or any other loan for at least the next few years while your bankruptcy scars are trying to heal. Finally, the actually bankruptcy mark will last on your credit report anywhere from 7 to 10 years depending how you filed.
So now that we know bankruptcy is not good for your credit score you might be wondering what can you do to help improve your score along the way. Here is a list of thing you could do.
- Pay your current bills on time. Once the bankruptcy process is over it is vitally important that you pay all bills on time otherwise this could add to more credit issues over time.
- Build up your savings. It’s also vitally important that you work to build up some type of savings. This can go a long way to prove to a bank that you can handle a loan and that you are prepared to take on the financial responsibilities involved.
- Buy everything in cash. Next pay everything you buy with cash. If you still manage to own a credit card after bankruptcy don’t use it. Pay with cash to keep yourself from piling up debt again.
If you can follow these tips you may be able to avoid further damage to your credit score and eventually get your life back to normal at some point.
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