Topic: What happens to your credit score when you file bankruptcy?
Q: Sometimes bankruptcy is inevitable. What happens to your credit score when you file bankruptcy?
A: When you file for bankruptcy, your credit score is can drop between 75 and 200 points, depending upon where your score was at to begin with. The new score will be based on how many points have been lost. For example, if your credit score was close to 750 your new score would be close to 550.
Q: That’s a pretty large drop. How can someone rebuild their score after bankruptcy?
A: Rebuilding your credit score after bankruptcy takes time. It’s important to make a commitment to budgeting and money management. You can also monitor your credit score regularly. Most importantly, have an honest conversation with your financial institution. Tell them your story; be honest about what lead you to bankruptcy. While you may not think it may help, they may have some solutions to get you back on track again.