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How long does a bankruptcy stay on your credit report?
How long a bankruptcy stays on your credit report depends on the type you filed for, but it’ll typically take either 7 or 10 years to fall off your report. 1 To find out the exact amount of time, you’ll need to first check what kind of bankruptcy you have. The most common types are chapter 7 bankruptcy and chapter 13 bankruptcy.
Chapter 7 vs. chapter 13 bankruptcy
The main difference between chapter 7 and chapter 13 bankruptcy is whether or not you continue paying off your debts. You still make payments with chapter 13 bankruptcy, but you don’t make any payments with chapter 7 bankruptcy. For this reason, chapter 7 bankruptcy stays on your credit report longer.
Chapter 7 bankruptcy eliminates your eligible debts so that you don’t have to repay them in cash, although before they’re discharged, you may have to sell some of your assets to pay off as much as you can. 2
By contrast, chapter 13 bankruptcy doesn’t eliminate all of your debts and doesn’t entail selling off your assets. Instead, it involves creating a repayment plan so that you can pay off some or all of what you owe. 3
In both cases, the filing date determines when the bankruptcy will come off your credit report. Note that the filing date is not the same as the discharge date, which is the date on which you’re officially no longer liable for your debts.
How long does chapter 7 bankruptcy stay on your credit report?
A chapter 7 bankruptcy will stay on your credit report for 10 years after the filing date. 1 However, the negative marks associated with the debts that you couldn’t repay, such as late payments, will generally come off your credit report within 7 years. 4
How long does chapter 13 bankruptcy stay on your credit report?
A chapter 13 bankruptcy will stay on your credit report for 7 years. 3 This makes it the least severe type of bankruptcy you can have as an individual consumer.
How to remove bankruptcy from your credit report
As frustrating as it is, there’s nothing you can do to get a bankruptcy off your credit report early unless it’s a credit reporting error. The normal methods of removing negative items from your credit report (such as sending a goodwill letter or negotiating pay for delete) aren’t applicable to bankruptcies.
All negative items on your credit report, including bankruptcies, will eventually be removed (usually within 7 to 10 years), but you can’t speed up the process. 8
The rare exception is if the bankruptcy is an error. If there’s a bankruptcy on your credit report that you never actually filed, you can file a dispute with the credit bureaus that are reporting it to have it removed. If the bureau confirms that the bankruptcy is a mistake, they will remove it from your reports.
If you did actually file for bankruptcy, then don’t worry. Even though you can’t get it removed early, there are things you can do to mitigate the damage it has on your credit and finances.
The best thing you can do is make sure that you consistently make on-time payments for all of your bills from now on. Payment history is the biggest factor influencing your credit score, accounting for 35% of your FICO score.
Here are some other steps you can take to improve your credit over time:
- Try to keep your credit utilization rate as low as possible.
- Apply for a secured credit card or credit builder loan.
- Consider asking a family member with good credit to either cosign a loan for you or add you as an authorized user on one of their credit card accounts.
How does bankruptcy affect your credit?
A bankruptcy will hurt your credit score, but how big the effect is depends on what your credit history was like leading up to the bankruptcy. Your credit score will take a bigger hit if your credit was better to begin with. 4
Even if your score doesn’t drop by much, having a bankruptcy on your report can make it hard to open new lines of credit or take out loans. You might end up paying higher interest rates or get approved for a lower amount. Some lenders and creditors might even deny you credit because they think that there’s a high risk that you won’t be able to repay your debt.
Credit repair is a long process, but there are things you can do, both right now and in the coming months and years, to improve your credit score. Even though a bankruptcy will stay on your credit report for 7 to 10 years, the effect it has on your credit score will diminish over time.