Bankruptcy and Your Credit Score

Before you file for bankruptcy, you need to fully understand all the ramifications. To tell it straight, your credit score will definitely drop after you file for bankruptcy. There is no set formula as to how much it will drop, but many people have seen a drop of 100-200 points after they filed.

Now for many people, it's important to still file for bankruptcy even though your credit score is bound to drop. Getting the creditors off your back and your overwhelming debt behind you is an important step to moving on with your life. If you do elect to file for bankruptcy, it is mandatory that you receive credit counseling - and during that time you should ask some detailed questions about your credit score.

After you come out of bankruptcy it's important to check with the big 3 Credit Companies - TransUnion, Equifax and Experian to make sure that all your old debts have been removed from your credit score. Very often these companies will continue to include old debts on your credit report even though you've already filed for bankruptcy and they should have been removed.

Every year you are entitled to a free annual credit report, and you can get that from the Federal Trade Commission (FTC). It's important to request your free report before you file for bankruptcy so you can see all your outstanding debts and then sometime after you complete the bankruptcy process so you can make sure the slate has been wiped clearn.

Take responsibility for your actions and when you come out of bankruptcy, you can start repairing your credit rather quickly. It may seem counter intuitive, but it will be important that you get a credit card after bankruptcy, so you can begin to start establishing credit again. Make sure to keep the monthly balance to a level that you can afford and the make the full payment each month. In no time you will have your credit score back up to where it was before bankruptcy!