It’s unlikely the bankruptcy will cause your score to decrease more. However, if you have a high credit score and still need to file bankruptcy (not uncommon) then it’s possible you’ll see a decrease in your score.

Despite the fact that a Chapter 7 bankruptcy will be reported on your credit report for up to 10 years (7 years for a Chapter 13 case), once you’ve received a discharge you can still improve your credit score during that period. Because a person has taken action to improve their financial situation, their credit score will begin to increase shortly after receiving a discharge. But in order to build your credit score after bankruptcy it’s important to take, at minimum, these three steps.

1) If you have a car loan or mortgage that weren’t discharged in the bankruptcy case makes sure they are paid on time each month.

2) Get a new credit card. (Low limit unsecured or a secured card) and make sure to pay it on time and avoid running a balance in the next billing cycle. Make sure the credit card company (underwriter) reports to the three credit bureaus.

3) Check your credit report at least once a year for accuracy. Go to www.annualcreditreport.com

The Law Office of Jeremy F. Peck and Monterey Peninsula Bankruptcy will be happy to answer any question you may have regarding how filing bankruptcy will affect your credit score. Call us at (831) 224-3199.