How long does it take for bankruptcy to stop affecting my credit file?
When you declare bankruptcy, that information will stay in your credit file for seven years. Every time that a lender or a potential employer requests information, they will be advised of the bankruptcy. While individual lenders determine the rating you will receive, a history of bad credit and high risk will usually have a negative effect.
Filing for bankruptcy does not necessarily mean that you will not be eligible for credit; it does, however, mean that you will probably be paying a high rate of interest. Unfortunately, a history of bad credit means that you are a risk for any lender and being considered a risky prospect can cost you a lot of money.
You can also still have credit cards. Some stores may give you credit; it depends on their requirements. And you can certainly apply for a secure credit card, if your ratings are too low to qualify; you can get a pre paid debit card, which will allow you the conveniences of a credit card.
It is important that any payments you are responsible for making from the time you file for bankruptcy are not only made on time, but that they are paid in full. This can reflect positively on your credit file because it shows that you can make your payments on time. It will take time and effort to turn your bad credit history into good credit history, but it can be done.
Lastly, do not apply for credit or take on any payments until you are financially solvent. You do not want to take the chance that you will have late payments or default on another obligation. It would only make your situation worse. Once you are in a position to make payments, you will need to apply for credit and use it whenever possible so that you can build a good payment history. Just make sure that you don't use too much of it. You want to keep a large percentage of your available credit open for the fact that it doesn't look like you are in a dire financial situation that forces you to live off of your credit. Even if that is not the case, using too much of the credit that is granted to you will give that impression. Not using too much of your credit also increases your credit score.
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