Whether you file Chapter 7 bankruptcy or Chapter 13 bankruptcy, your credit score takes an immediate plunge. This is due to the fact that the credit scoring formula serves as risk management for lenders. An individual who has had debt discharged through bankruptcy is more likely to do so again in the future than someone who has never filed. In addition, filing for bankruptcy also signifies an inability to successfully manage debt. Fortunately, the credit damage you’ll suffer doesn’t last forever, and there are steps you can take to quickly begin rebuilding your credit score after filing for bankruptcy.
Dispute Debts Your Credit Report Doesn’t Show as Discharged
After your debts are discharged through Chapter 7 or Chapter 13, your credit report should reflect that fact. Once the court discharges your bankruptcy, each trade line within your credit file should carry a balance of zero.
Unfortunately, this isn’t always the case. Accounts that continue to report overdue delinquent balances further drag down your credit score and prevent you from building positive credit post-bankruptcy. While debts that were discharged through bankruptcy will never appear on your credit report as positive trade lines, you have the right to dispute debts that appear in error with both the credit bureaus themselves and the creditors reporting the errors.
