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"Small Town Attention....

                 To BIG City Problems."

"Small Town Attention....To BIG City Problems."
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Call to schedule a consultation 763-398-1676

In short, yes. Filing bankruptcy is a serious financial move that will impact your credit score, but most people who file already have a severely compromised credit score from not paying bills. Chapter 13 bankruptcty will remain on your credit report for 7 years; Chapter 7 for 10 years. Practically speaking, however, a bankruptcy will really only effect your short-term (2-3 years) ability to purchase real estate. Although a perfect 850 credit score will be a long way off, it is possible to build credit back up to a respectable level in a relatively short period of time.

Steps to Building Better Credit

If you are contemplating bankruptcy, your credit rating is probably already damaged, so bankruptcy will likely only cause a small dip in your score. The key to boosting a credit rating back up is to transform your financial habits after bankruptcy. Ensuring your credit report is accurate after filing is very important.  Most people with great credit typically have several credit lines, so establishing some solid lines of credit will help raise your score. You can also  “piggyback” off of family or friends by being added as an authorized user on their credit cards, reaping the benefits of their solid credit activity. Within two or three years, provided you have been honoring your credit obligations, you could be in a better position to receive loans at decent interest rates and will likely be sufficiently credit worthy to qualify for a home loan.

Despite the often overinflated negative perception of the effect of bankruptcy on credit scores, following good credit-building steps after bankruptcy will go a long way towards redeeming your credit score.

 

If you're looking for qualified and trusted Minneapolis/St. Paul attorneys, please call our Golden Valley office at 763-398-1676 or fill out this quick form to schedule a consultation.

This website features educational information based on general legal principles in Minnesota.  Specific legal advice is contingent upon the unique facts of each case.  Therefore, you should not rely only on this information for your particular legal issue.  Contact an attorney to obtain advice specific to your legal situation.  Read our full disclaimer.

Informational Articles Disclaimer

This website features educational information based on general legal principles in Minnesota.  Specific legal advice is contingent upon the unique facts of each case.  Therefore, you should not rely only on this information for your particular legal issue.  Contact an attorney to obtain advice specific to your legal situation.  Read our full disclaimer.

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