How Long Does Bankruptcy Stay on Your Credit Report and What You Can Do About It?
Bankruptcy can be a powerful tool for eliminating overwhelming debt and achieving a fresh financial start. However, many people worry about how long bankruptcy will impact their credit report and credit score. While bankruptcy does remain on your credit report for several years, its effect lessens over time, and there are proactive steps you can take to rebuild your credit faster.
Consult a Los Angeles bankruptcy attorney to explore how long Chapter 7 and Chapter 13 bankruptcies stay on your credit report, what this means for your financial future, and how you can take control of your credit after filing.
How Long Does Bankruptcy Stay on Your Credit Report?
The length of time a bankruptcy remains on your credit report depends on which type of bankruptcy you filed:
- Chapter 7 Bankruptcy: Remains on your credit report for up to 10 years from the date of filing.
- Chapter 13 Bankruptcy: Remains on your credit report for up to 7 years from the date of filing.
The difference in reporting time reflects the nature of each bankruptcy type. Chapter 7 bankruptcy involves liquidating assets to discharge debts, making it more severe in the eyes of credit bureaus. Chapter 13 bankruptcy, on the other hand, involves a structured repayment plan, so it has a shorter reporting period since you are making an effort to repay creditors.
Although bankruptcy stays on your credit report for years, its impact diminishes over time—especially if you take proactive steps to rebuild your credit.
How Does Bankruptcy Affect Your Credit Score?
Your credit score is heavily influenced by your payment history, debt levels, and credit utilization. Because bankruptcy typically involves missed payments, high debt levels, and accounts being sent to collections, it can significantly lower your score—often by 100 to 200 points or more, depending on your starting score and financial history.
However, the long-term impact is not as severe as you might think:
- Most of the damage happens immediately after filing, but the effect weakens over time.
- If you rebuild credit responsibly, you can see improvements within 12 to 24 months after your discharge.
- Lenders focus on recent activity, so if you establish good financial habits post-bankruptcy, you can qualify for credit sooner than you may expect.
Can You Remove Bankruptcy from Your Credit Report Early?
Unfortunately, you cannot legally remove a legitimate bankruptcy from your credit report before the designated reporting period expires. However, you can take steps to ensure it does not stay on your report longer than necessary:
1. Check Your Credit Report for Errors
After your bankruptcy is discharged, regularly check your credit reports from Experian, Equifax, and TransUnion to ensure the information is accurate. Common errors include:
- The bankruptcy being reported longer than allowed (7 or 10 years).
- Discharged debts still showing as unpaid instead of showing a zero balance.
- Incorrect bankruptcy filing dates that could extend its reporting period.
If you find errors, dispute them immediately with the credit bureau to have them corrected.
2. Monitor Credit Reporting Timelines
The bankruptcy discharge date is different from the filing date. The 7- or 10-year period starts from the filing date, not when the bankruptcy is completed. If the bankruptcy remains on your report beyond the allowed timeframe, you have the right to dispute it with the credit bureaus and request its removal.
How to Rebuild Your Credit After Bankruptcy
Although bankruptcy affects your credit, you don’t have to wait 7 or 10 years to improve your financial standing. Here’s how you can start rebuilding your credit right away:
1. Get a Secured Credit Card
A secured credit card requires a refundable security deposit and helps you rebuild credit by reporting on-time payments to the credit bureaus. Choose one with low fees and use it responsibly—keeping balances low and paying in full each month.
2. Pay Bills on Time
Your payment history accounts for 35% of your credit score, making on-time payments the most crucial factor in credit rebuilding. Consider setting up automatic payments to ensure you never miss a due date.
3. Become an Authorized User
If a friend or family member with good credit adds you as an authorized user on their credit card, their positive payment history can help boost your credit score.
4. Apply for a Credit Builder Loan
Many credit unions and online lenders offer credit builder loans, where the lender holds the loan amount in a savings account while you make fixed monthly payments. This helps build a positive payment history without taking on new debt.
5. Keep Your Credit Utilization Low
If you obtain new credit, aim to keep your credit utilization below 30%—meaning if you have a $1,000 credit limit, try not to carry a balance higher than $300. Lower utilization rates can improve your score faster.
6. Monitor Your Credit Score Regularly
Tracking your credit score helps you see how your actions impact your progress. Free services like Credit Karma, Experian, and your bank’s credit monitoring tools can help you stay informed.
7. Avoid High-Interest Debt
Stay away from payday loans, predatory lenders, and high-interest credit cards that can trap you in a cycle of debt. Focus on low-risk financial products designed for credit rebuilding.
8. Be Patient and Consistent
While bankruptcy stays on your credit report for several years, your credit score can start improving in as little as 12 months if you establish good financial habits. The key is consistent, responsible credit use over time.
Contact Wadhwani & Shanfeld
Although bankruptcy remains on your credit report for 7 to 10 years, it does not prevent you from rebuilding your financial life. By checking your credit report for errors, using credit wisely, and paying bills on time, you can start seeing improvements within a year and work toward qualifying for better financial opportunities.
If you’re concerned about the impact of bankruptcy on your credit or need guidance on rebuilding your finances, contact Wadhwani & Shanfeld today. Our experienced bankruptcy attorneys can help you navigate your financial recovery and set you on the path toward a stronger, debt-free future. Schedule a consultation to take control of your financial future today!
Sources:
experian.com/blogs/ask-experian/when-does-bankruptcy-fall-off-my-credit-report
myfico.com/credit-education/faq/negative-reasons/bankruptcy-types
