Bankruptcy and Your Credit

Understand how bankruptcy may affect credit reports, borrowing opportunities and your financial future.

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In short

Bankruptcy is a legal process that can resolve certain debts. It is typically reported on credit reports for a period of time set by law, and it is one of many pieces of information lenders may review.

How bankruptcy appears on a credit report

A bankruptcy filing is generally listed in the public records section of a credit report. Accounts included in the bankruptcy may also show a status such as "included in bankruptcy" or "discharged".

The exact reporting period depends on the type of bankruptcy and applicable law. Your own credit reports are the best place to see how your information is currently listed.

What lenders may consider

Each lender sets its own criteria. Alongside a past bankruptcy, many lenders also look at more recent information, for example:

  • On-time payments on any accounts opened since the bankruptcy
  • Current income and existing obligations
  • How long ago the bankruptcy was filed or discharged
  • Overall balances compared with available credit

Reviewing your reports after discharge

After a discharge, it can be helpful to request your reports and check that discharged accounts are reported accurately. If you believe something is inaccurate, you can dispute it directly with the credit bureau.

Sources

This article is general educational information, not individualized legal, tax or financial advice.

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