Your Credit Score After Bankruptcy Even Though You Are Debt Free

Your Credit Score can be an important asset. It determines your ability to get credit, and the cost. It could be a factor in your getting a job, renting an apartment, and purchasing a house or a car. When you file bankruptcy, your credit score will be affected. In some cases, however, it’s affect on your credit score may be minimal, and may be temporary.

If you are way behind on paying your bills, and have been for some time, your credit score is already bad. When you file bankruptcy, and receive a bankruptcy discharge, your credit score might actually go up. This happens because all of the creditors listed on your credit report indicate your current balance, your available credit, your past due balance and your payment history. When you get your bankruptcy discharge, each listing on your credit report will simply say included in bankruptcy or discharged in Bankruptcy. The balance due and past due balances will be listed as zero. While the bankruptcy filing is a negative on your credit score, the omission of balances due and past due balances being debt-free will have a positive effect on your score.

Even if your credit score decreases when you file your bankruptcy, it will not stay low forever. Most people who file Chapter 7 bankruptcy find that within two years of filing, their credit score improves to a good or excellent level. The myth that you cannot get credit for 10 years after filing bankruptcy is just that a myth.

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