Bankruptcy

If a bankruptcy was reported incorrectly or contains errors, you may be able to have it removed by filing a dispute. Otherwise, you’ll need to wait until the bankruptcy leaves your report on its own—after seven years for Chapter 13 bankruptcy or 10 years for Chapter 7 bankruptcy.

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How long does bankruptcy stay on your credit report?

A Chapter 7 bankruptcy can remain on your credit report for up to 10 years, while a Chapter 13 bankruptcy can stay on your report for up to seven years.

The FCRA lays out the longest that a bankruptcy can remain on your credit report. This means a bankruptcy can be removed earlier than the legal maximum, but it must be proven that it is misreported, unsubstantiated or otherwise found inaccurate. Unfortunately, a bankruptcy cannot be removed simply because it is damaging your credit score.

When you originally filed for bankruptcy, a means test determined whether you qualified for Chapter 7 or Chapter 13 bankruptcy.

 

Because Chapter 7 bankruptcy involves elimination of debt without payment, the requirements are more stringent and the bankruptcy remains on your report for a longer period of time—up to 10 years.

 

On the other hand, Chapter 13 bankruptcy involves consolidation and partial repayment, so the requirements are less strict and the bankruptcy stays on your report for just seven years.

Even with a bankruptcy still on your credit report, it’s possible to begin rebuilding your credit—that way you’ll be in great shape by the time the bankruptcy falls off your report.

How to rebuild your credit after bankruptcy

Rebuilding credit after declaring bankruptcy is difficult, but with patience and perseverance it is possible. Many lenders who see a bankruptcy on your report will be unlikely to offer you new lines of credit like a loan or credit card, so you’ll need to take alternative approaches to rebuilding your credit history.

Here are some options for starting to rebuild your credit—even if you have a bankruptcy on your credit report.

  • Use a secured credit card. A secured credit card includes a cash deposit, so lenders can offer one to you with no risk. Payment activity is reported to the credit bureaus, however, so making on-time payments will help you start to rebuild your credit.

  • Get a credit builder loan. A credit builder loan functions similarly to a traditional loan, except that you make payments each month and then receive the full balance at the end rather than the beginning. Because these loans present no risk to the lender, you can often get one even after filing for bankruptcy and create an opportunity to rebuild credit.

  • Become an authorized user. A trusted friend or family member who adds you as an authorized user on their credit card enables you to include a new account on your report with access to credit you’d be unlikely to get on your own. Positive credit history on that card will be included in your credit report as well.

 

A bankruptcy can initially feel devastating, but it also represents a new opportunity to start a new journey with credit. While it’s not possible to remove a legitimate bankruptcy from your credit report, its impact wanes over time until it finally leaves your report after seven to 10 years.

In the meantime, you can file a dispute with the credit bureaus if your bankruptcy contains any inaccurate information. Even with a bankruptcy on your report, you can start taking on new credit with the aim to pay on time and in full each month—the credit behaviors that are likely to lead to a high score in the future.