How will filing for bankruptcy affect my credit score?

Filing for bankruptcy can have a significant effect on your credit score. When you file for bankruptcy, the court sends a notification to the three major credit reporting bureaus and your credit score is immediately impacted. The exact effect on your credit score will depend on the type of bankruptcy you file. Generally, a Chapter 7 bankruptcy can drop your credit score by 200 to 250 points and a Chapter 13 by 140 to 160 points. This initial drop in your credit score can hurt your ability to obtain new credit lines and your interest rate on any new credit lines. Beyond the initial drop, filing for bankruptcy can cause further damage to your credit score. Additional late payments, new loan inquiries, or maxed out credit cards can drive down your score further and will take time and effort to rehabilitate. Over time, however, your credit score can improve after filing bankruptcy. By making timely payments and keeping credit balances low, you can begin to repair your credit and improve your score. Additionally, each year that passes after filing bankruptcy can improve your score, as negative marks start to expire from your credit reports. Ultimately, filing for bankruptcy can have a significant effect on your credit score, with the exact amount depending on the type of bankruptcy filed. Therefore, it is important to consider all other options before filing for bankruptcy to ensure you make the best decision for your financial future.

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How will filing for bankruptcy affect my credit score?

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