Inevitably, bankruptcy will have a negative impact on your credit score. That impact will vary though, depending on your payment history and reliability prior to filing for bankruptcy. If you are delinquent on a lot of accounts and your debt-to-asset ratio is uncharacteristically high, then you credit score will already be low. A bankruptcy may not make too much of a dent on a credit score that is already heavily damaged.

If you had a high credit score prior to filing for bankruptcy, the impact will be much more evident on your report. Courts are required to report all bankruptcies to the credit reporting agencies who in turn will add the bankruptcy to a person's credit report. Thankfully, the bankruptcy won't remain on your credit report for long. If you file for a Chapter 7 or a Chapter 13 bankruptcy, then the history of the bankruptcy may remain on your credit score for up to ten years.

After this time, there will be no record that you ever filed for bankruptcy on the report. The only exception is if you apply for a loan or a life insurance policy that is greater than $150,000 or if you apply for a job with an annual income that is greater than $75,000. In these situations, credit reporting agencies have the right to report your bankruptcy for longer than ten years.

Thankfully, you have the ability to improve your credit score after bankruptcy. All you have to do is create a realistic budget that you can stick to, and then pay all of your existing bills on time. When you commit to establishing great payment habits, it will show the credit reporting agencies that you are a reliable consumer. As time goes on, your credit score will continue to go up. If you want more information about how bankruptcy affects your credit, talk with a local bankruptcy attorney today. With the right attorney on your side, you will have the ability to work through damage to your credit and navigate bankruptcy in a way that allows you to get the fresh start that you need.