Credit reports are made up of all of your credit history from lenders and public data. In this report, you’ll find information about the type of credit you have, your payment history, and the amount of time your accounts have been open. It also contains data about your residency, bankruptcy filings, and litigation.
Lenders use your credit report to gauge creditworthiness and determine limits, interests rates, and general credit terms. This information is incredibly important when seeking a private school loan, mortgage, or auto loan. If you’ve filed for bankruptcy, the information will be on your credit report but the question is for how long?
What is the Average Lifespan of Bankruptcy Information on My Credit Report?
Contrary to popular belief, bankruptcy does not have to ruin your financial future. Negative information on your credit report has an average lifespan of 7 years in your file. In the case of bankruptcies, this information should be removed after 10 years. Remember, you can always request the removal of any inaccurate or outdated information from your file.
The information on your credit report consists of information from lenders, public data, and collection agencies. This information is then listed by credit reporting agencies.
Chapter 7 and Chapter 11 bankruptcy information will typically stay on your file for 10 years from the filing date. You’ll find the same lifespan for dismissed and non-discharged Chapter 13 bankruptcies. However, it’s important to understand that this 10-year-lifespan refers to the public record. You’ll find discharged debt, liens, and judgements are removed after 7 years. This includes paid tax liens. The public record of Chapter 13 bankruptcy is removed after 7 years as well.
What About Collection Accounts and Late Payments?
If you have any collection accounts on your file, they will remain in your file for 7 years from the initial past due date. This same rule applies to any credit accounts not paid as agreed and late payments. Installment and revolving debt may remain in your file for as long as 10 years.
Can My Credit Score Be Improved?
Of course, your credit score won’t be in the best shape after bankruptcy proceedings. However, what really matters is how you handle your finances after bankruptcy. It’s possible to obtain a healthy credit score within a few years.
To do so, seek out opportunities to prove your financial aptitude. Make payments on-time and keep low balances on your credit cards. You may find it helpful to apply for secured credit cards and rebuild your credit reputation that way.
Of course, there are downsides to be aware of. You may find it relatively easy to obtain credit after a brief period of time has passed after filing for bankruptcy. However, these credit cards may not have the most favorable rates of interests or payment terms. Lenders may be reluctant to offer credit and demonstrate concerns over double bankruptcy filings. As time passes and you work to reestablish your credit, it will be easier to find better options.
Don’t let inaccurate or outdated credit report information harm your financial future. Work with qualified bankruptcy attorneys you can trust by contacting us for a free consultation today.