How Long Does Bankruptcy Stay on Your Credit Report?

While bankruptcy can give you a fresh start when it comes to your finances, it will remain on your credit report from seven to 10 years. How long bankruptcy stays on your credit report depends on what type of bankruptcy you file for: Chapter 7 or Chapter 13.

How long does bankruptcy stay on your credit report?

The type of bankruptcy you file for — Chapter 7 or Chapter 13 — determines how long it stays on your credit report.

Your bankruptcy filing can be found in the public records section of your credit report as well as the account information section. If you apply for credit, lenders can see your bankruptcy filing when they run a credit inquiry.

Chapter 7 bankruptcy

If you file for Chapter 7 bankruptcy, it will remain on your credit report for up to 10 years. After 10 years passes, your bankruptcy filing will automatically drop off your credit report.

Chapter 7 is the most common form of non-business bankruptcy among consumers. This filing is for those who can’t afford to make payments. It allows you to discharge all eligible debts, though you may have to give up some valuable assets which will be sold off to repay your creditors.

Chapter 13 bankruptcy

If you file for Chapter 13 bankruptcy, it will stay on your credit report for seven years, starting on your filing date. Like with Chapter 7, it will automatically come off your credit report after the allotted time.

This type of bankruptcy is structured as a repayment plan that lasts between three to five years. Chapter 13 is for individuals who have a regular income and may not qualify for Chapter 7.

How soon will my credit score improve after bankruptcy?

Filing for bankruptcy affects your credit — your credit score will go down between 100 to 200 points — and can limit your future credit opportunities. For instance, if you filed for Chapter 7, you’ll need to wait four years after your discharge date before you can take out a conventional mortgage.

As long as you take steps to rebuild your credit after bankruptcy, you could see your credit score increase within two years. Some may even see improvements within one year.

However, many lenders and creditors offer credit building products that can help you improve your credit standing in the meantime.

Can you remove bankruptcy from your credit report?

Bankruptcy automatically falls off your credit report after seven or 10 years, depending on the type of bankruptcy you filed for. It can’t be removed before then, unless it was added to your report by mistake.

If bankruptcy was mistakenly added to your credit report, you can get the bankruptcy removed by submitting a dispute to the credit bureaus. You can file online, by mail or over the phone.

After you file a credit report dispute, the reporting credit bureau has 30 to 45 days to investigate and five days to let you know what the results are.

Keep in mind that even after bankruptcy comes off your credit report, bankruptcy filings are considered public record.

6 ways to rebuild credit after bankruptcy

Make on-time payments

Your payment history makes up the largest portion of your credit score — 35% of your FICO Score and 40% of the VantageScore 3.0 model.

Missing a payment can cause your credit score to drop as much as 180 points, so keeping up with your bills can play a large role in improving or decreasing the overall health of your credit.

Become an authorized user

If a trusted friend or family member makes on-time payments and has a low credit utilization on their credit card, your credit may improve if they choose to add you as an authorized user.

Also known as “piggybacking,” becoming an authorized user on a credit card can boost your credit score as long as the primary cardholder continues to show responsible financial habits.

As an authorized user, you aren’t responsible for making payments, but you may have access to use the credit card. Make sure to check that the credit card issuer reports payments to the credit bureaus so those records will show up on your credit report.

Apply with a cosigner or co-borrower

Applying for a personal loan with a cosigner or co-borrower — such as a trusted friend or family member — can boost your approval odds.

An important distinction to keep in mind is that while a cosigner will not have access to the funds you borrow, a co-borrower will. However, both will be held equally responsible as you for the repayment of the loan if you’re unable to pay it off.

Get a secured loan or credit card

A secured loan or secured credit card is much less dependent on your credit than an unsecured form of debt since it requires that you put down collateral.

Because your lender can seize the collateral you put down if you’re unable to make payments, there is some risk involved. However, with a secured form of credit, you’ll likely be able to qualify for much lower interest rates than you would with unsecured debt.

Use a credit builder loan

With a credit builder loan, instead of receiving your loan funds upfront, you’ll receive the money after you’ve repaid the loan.

Your lender will put your funds into a restricted savings account or certificate of deposit. Once the loan is repaid, you’ll have access to the money.

While credit builder loans aren’t common, you may be able to access one through a local bank or credit union.

Check your credit reports

Unfortunately, it isn’t uncommon for errors to show up on your credit reports. Because your credit history determines your credit score, it’s important to check your credit reports on a regular basis.

Each credit bureau — Equifax, Experian and TransUnion — provides its own report, so you’ll want to check each one.

If you do come across incorrect information on your credit reports, you can submit a dispute to the credit bureaus. If you get it removed from your credit report, it could help your score.