Recovering from bankruptcy can be challenging, especially when it comes to rebuilding your credit. Filing for bankruptcy significantly lowers your credit score, and insurance companies, potential employers, cell phone providers, and landlords use this score to determine your level of financial trustworthiness and whether they should extend credit to you.
You may have difficulty obtaining credit, and if you do obtain it, it’s likely that you will have to pay a higher than average interest rate on your purchases. Some creditors may even ask for a substantial down payment. It can be a challenge to improve your credit rating—but it can be done.
Bankruptcy Will Not Impact Your Credit Score Forever
Although bankruptcy is a negative mark on your credit report, it will not stay on your report forever. According to Nolo, bankruptcy must come off of your credit report within ten years. If your bankruptcy is more than ten years old from the day you filed, you can file a dispute with the credit reporting agencies and have it removed.
4 Steps to Improving Your Credit Score
Here is a list of steps you can take to improve your credit score to help you recover from bankruptcy:
Recovering from bankruptcy entails reestablishing healthy credit. It can be a challenge, but by monitoring your credit reports and scores and paying your bills on time, you will start to see your credit score improve.
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Filed Under: Credit Reports and Scores
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