How Bankruptcy Affects Your Credit Score & How to Rebuild

Published on February 15, 2025 by Casey Yontz, Bankruptcy Attorney

Does Bankruptcy Ruin Your Credit Score?

Bankruptcy does have an impact on your **credit score**, but it is not the **end of your financial future**. Many people believe that bankruptcy permanently ruins credit, but in reality, it provides a **fresh start** for rebuilding financial health.

A bankruptcy filing **stays on your credit report** for a period of:

How Much Does Bankruptcy Lower Your Credit Score?

The **exact credit score drop** varies based on your financial history. If you have **excellent credit** (700+), bankruptcy can reduce your score by **100 to 200 points**. If your credit is already low (under 600), the impact is **less severe**.

Can You Get Credit After Bankruptcy?

Yes! Many people **successfully rebuild their credit** after bankruptcy. Here’s how:

✅ Ways to Rebuild Credit

  • Apply for a **secured credit card**.
  • Make **on-time payments** every month.
  • Keep **credit utilization low** (below 30%).
  • Monitor your **credit report** for errors.
  • Consider a **credit-builder loan**.

❌ Mistakes to Avoid

  • Taking on **high-interest loans** too soon.
  • Missing **bill payments**.
  • Closing old accounts (hurts credit length).

How Long Does It Take to Rebuild Credit?

Most individuals can see **significant credit improvement** within **12 to 24 months** of responsible financial management.

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Concerned about bankruptcy and your credit score? An **experienced bankruptcy attorney** can help.

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