How can I minimize the negative effect of a bankruptcy?
A bankruptcy is going to be factored into your FICO® score until it falls off of your credit report. While it may take up to ten years for a bankruptcy to fall off of your report, the impact of the bankruptcy will lessen over time.
If you plan to file a bankruptcy, here are some things you should do to make sure your creditors are accurately reporting the bankruptcy filing:
- check your credit report to ensure that accounts that were not part of the bankruptcy filing are not being reported with a bankruptcy status.
- make sure your bankruptcy is removed as soon as it is eligible to be "purged" from your credit report.
After a bankruptcy has been filed, the sooner you begin retaining or re-establishing credit in good standing, the sooner you can expect your FICO score to rebound. A good practice is to obtain a secured credit card and continually make all of your payments on time. As time passes and the impact of the bankruptcy lessens, you might apply for a traditional credit card and also continually make all of your payments on time.
The Score That Matters®
FICO Scores are the standard credit score in the US, used in more than 90% of lending decisions.