How Soon Will My Credit Score Improve After Bankruptcy?

Quick Answer

A bankruptcy can negatively impact your credit score for as long as it remains on your credit reports, which is up to 10 years. However, there may be some steps you can take immediately to start rebuilding your credit after bankruptcy.

A man holding a tablet and working late at night while checking his credit score

Experian, TransUnion and Equifax now offer all U.S. consumers free weekly credit reports through

Bankruptcy can be a necessary step for people who have no other way to deal with their debt. But the process can wreak havoc on your credit scores. Bankruptcy will remain on your credit reports for up to 10 years, though its negative effect on your credit will lessen over time.

Here's what you need to know about how bankruptcy impacts your credit, what you can do to rebuild your credit history and how long that process can take.

What Happens to Your Credit When You File for Bankruptcy?

When you file for bankruptcy, your credit score will take a significant hit, though exactly how much of an impact it will have will vary from person to person. Your credit profile is unique to you and made up of several variables. What's more, the type of bankruptcy—Chapter 7 or Chapter 13—will impact your credit differently.

That said, here's what you can expect:

  • Your credit score will decrease. Filing for bankruptcy indicates that you can no longer pay your debts as originally agreed. Because your payment history is the most influential factor in your FICO® Score , you can expect to see your credit score drop. The amount of the decrease will depend on your credit score before filing, the events leading up to the bankruptcy and your overall credit history.
  • You'll have trouble qualifying for credit. If you have an open bankruptcy, you generally can't apply for any new credit. Even after your bankruptcy has been discharged, your options will be limited.
  • The bankruptcy will stay on your reports for years. Chapter 13 bankruptcy, which involves restructuring your debt with a new repayment plan of three to five years, will remain on your credit reports for seven years from your filing date. In contrast, Chapter 7 bankruptcy will stay on your reports for 10 years because you're liquidating assets to pay off a smaller portion of your debt.

How to Build Back Your Credit After Bankruptcy

Rebuilding your credit after bankruptcy can seem like an insurmountable task, especially considering that the bankruptcy record will stay on your credit reports for 10 years from the filing date.

Fortunately, however, the negative impact of a bankruptcy can diminish over time, especially as you take steps to practice good credit habits and add positive information to your credit file. Once your bankruptcy has been discharged, here are some steps you can take to help your credit history recover.

Review Your Credit Reports

Start by making sure that your bankruptcy is being reflected in your credit reports correctly. Then, take a look at the rest of the information in your credit reports to pinpoint other areas you can potentially address including inaccurate information, which you have the right to dispute with the credit bureaus.

You can access your Experian credit report anytime for free, and you can also review your TransUnion and Equifax reports for free at

Always Pay on Time

Sometimes you will be allowed to keep certain accounts open even after bankruptcy. If you still have open and active accounts that were not included in bankruptcy, making every payment on time moving forward is key to rebuilding your credit. The same goes for any new credit accounts you open.

Open a New Credit Account

It can be difficult to qualify for new credit after bankruptcy, but there are some options available:

  • Secured credit card: A secured credit card functions similarly to a traditional credit card, but it's designed for people with less-than-stellar credit scores. To get approved, you'll need to make a refundable security deposit, which is typically equal to your desired credit limit. As you use the card responsibly, the positive information can help increase your credit score. If you pay your balance in full each month, you can even avoid interest charges.
  • Credit-builder loan: Credit-builder loans are installment loans that provide you with the loan funds after you've finished making payments instead of upfront. Repayment terms may range from six to 24 months, and because the lender is holding on to the loan funds until it receives full payment, credit-builder loans typically have reasonable interest rates.

If you can't get approved for credit on your own yet, consider asking a loved one with good credit habits to add you as an authorized user on their credit card. Once you're added, the card issuer will report the full account history to the credit bureaus, which can help improve your credit.

Keep Credit Card Balances Low

For new and existing credit cards, plan to keep your balances low relative to your account credit limits. Your credit utilization rate—the percentage of available credit you're using at a given time—is one of the most important factors in your FICO® Score, so it's critical to keep it as low as possible.

If you have a secured card with a low credit limit, that may mean only using the card for occasional small purchases instead of for everyday expenses.

Sign Up for Experian Boost®ø

Experian Boost is a free feature that allows you to add monthly payments to your Experian credit file which aren't normally reported. That includes your cellphone and utility bills, rent payments, insurance premiums and even some streaming subscriptions.

Once you register, link the bank accounts you use to pay bills, and then select which payments you want to add to your Experian credit report. You'll be able to see the results instantly.

Monitor Your Credit Regularly

As you work to rebuild your credit, Experian's free credit monitoring service can make it easy to track your progress. You'll get access to your Experian credit report and FICO® Score powered by Experian data.

Additionally, you can get real-time alerts when changes are made to your credit report so you can stay on top of new developments.

How to Avoid Bankruptcy

While bankruptcy may be unavoidable for some, it's not a decision to take lightly. Before filing for bankruptcy, it's crucial that you explore all of your other options. Here are some alternatives that could potentially help you avoid bankruptcy:

  • Evaluate your situation. Take inventory of your debt to get a full picture of what you're dealing with. Creating a budget can also help you get a better idea of where your money is going, making it easier to determine whether you can afford your debt payments as is or on a modified basis. If possible, look for opportunities to increase your income to improve your cash flow.
  • Consider other debt repayment strategies. If your evaluation reveals that you have some options to handle your debt on your own, consider repayment strategies like the debt snowball and debt avalanche methods. If your credit is still in good shape, you may even consider consolidating your debt with a balance transfer credit card or consolidation loan.
  • Consult with a credit counselor. A credit counselor working with a nonprofit credit counseling agency can assess your situation and provide free, personalized advice for your situation. They may even recommend a debt management plan, which can help reduce the burden of unsecured debt like credit card balances by negotiating a restructured repayment plan with lower payments and interest rates.
  • Talk to your lender. Some lenders may be willing to provide some relief in the form of a lower interest rate or modified monthly payments, especially if they know you're on the brink of bankruptcy. That's because they stand to lose less by working with you.
  • Consider debt settlement. Debt settlement involves negotiating with your creditors to accept less than what you owe. This option can negatively impact your credit score, especially if you work with a debt settlement company or law firm that recommends that you stop making payments during the negotiation process. However, the credit impact from settling an account may still be less drastic compared to bankruptcy.

After you consider these options, consider hiring a bankruptcy attorney to get advice on your situation to determine whether bankruptcy is the best move for you.

The Bottom Line

Bankruptcy can greatly affect your credit score, but if it can set you up for a better financial future overall, it can still be a sound financial decision. Before you pursue bankruptcy, though, rule out all other alternatives and consult with professionals who can give you much-needed guidance.

As your bankruptcy wraps up, start strategizing about how you want to rebuild your credit. While it can take time to establish a good credit score after bankruptcy, being proactive about the process can help you achieve your goal faster.