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How long will it take my credit score to improve after Chapter 7?

On Behalf of | Mar 1, 2023 | Blog, Chapter 7 Bankruptcy

You can improve your credit score in the year or two following Chapter 7 bankruptcy. However, it will take about ten years before you see significant improvements.

That is a significant reason many people fear filing for Chapter 7 bankruptcy. While it does hurt your credit score, so does debt. However, for some people, bankruptcy gets rid of debt so that they can improve their credit score in the long run. If this is you, keep reading to see how it will affect your credit score in the long run.

How bankruptcy affects your credit score

The higher your credit score is, the more you will see it drop from bankruptcy. Unfortunately, that means you will probably have poor credit at the end of the process. That is because bankruptcy will show on your credit history, encouraging you to become more financially responsible before reaccumulating debt.

How you can build credit after

Once you have your final discharge, you must wait 30 days to start working on your credit. At this point, your accounts will all be at zero, and creditors must stop calling you. You can rebuild your credit score when the stay prevents creditors from collecting on your debt. Chapter 7 bankruptcy remains on your report for ten years, but you will see improvements each year if you work hard.

Sometimes, your report can show inaccurate bankruptcy information. When this occurs, you must contact the reporting agencies to fix this. You may also have to deal with companies that incorrectly discharge your debt. Bankruptcies keep creditors from harassing you. Therefore, protect yourself from companies that do not follow these procedures properly.