Is it possible to have a 700 credit score after bankruptcy, and if so, how long does it take to get a 700 rating? While there is no set formula for determining what your score will be a year or two down the road, there is overwhelming evidence that you can increase your rating dramatically within one to two years after filing. An experienced lawyer can discuss your case in detail and give you an idea of what effect your filing will have on your credit score, based on the experiences of past clients.
700 Credit Score After Bankruptcy
Once you file bankruptcy and start with a clean slate, your next goal will be, to increase your credit score. A lot of where your credit score is, and where you can get it to, will depend on where your score is before you file for bankruptcy. For example, if you maintained all of your accounts in perfect status and had a credit rating in the 800s on the day that your case is filed, then you may have a 700 credit score one year after you file. Now you may ask, “who would file bankruptcy with an 800 credit score?” Well, you’d be surprised. Imagine that you have a $700,000 mortgage and took out a $200,000 home equity loan, and the value of your home has dropped to $450,000. You can’t just walk away from your property and let it go to foreclosure, because you’ll end up being liable for a $250,000 home equity loan that is wiped out by the foreclosure. This is just one of many examples where a person with an excellent credit rating may have to file bankruptcy to obtain a fresh start.
When faced with a situation where you have excellent credit and are considering bankruptcy to get rid of a home equity loan debt, most people would just let their property go to foreclosure and live there for as long as possible without making mortgage payments. But if you have excellent credit, that may not be the best plan of action. If you file while you have excellent credit, your score will be high at the time your case is filed with the court. If you miss some mortgage payments, your credit rating will suffer and be lower at the time that you file, hence your after bankruptcy score will be affected accordingly.
So, lets go back to how you can attain a 700 credit score after bankruptcy. One way would be starting with a score in the 800s on the day that you filed your case, as in the scenario described above. The other way, would be to work on gradually and steadily rebuild your credit.
It has been my experience, having filed hundreds of cases for clients throughout San Diego County, that clients who steadily rebuild their credit after bankruptcy, on average, enjoy a credit rating in the low 600s within one to two years after bankruptcy. In my blog 600 Credit Score, I explained how many filers have a 600 rating within a couple of years after filing their case and obtaining a discharge. These same clients, if they continue to practice good credit habits and rebuild credit, can often attain a 700 credit score after bankruptcy within about 4-5 years, even while a bankruptcy is still on their credit report.
Now there is no guarantee that just because you practice good credit habits you’ll have a 700 score five years after bankruptcy in San Diego, and there is no guarantee that the FICO scoring system will not change significantly over the years.
Also, the more loans you have in good repayment status, the faster you’ll be able to raising your credit rating. If you don’t have any car loans or home loans, it will take you longer to raise your rating to the 700s than someone with a home loan and two car loans that pays all of those loans on time after bankruptcy.
The best you can do is talk to a San Diego bankruptcy attorney, review your situation in detail, and see what clients in your similar situation have been experiencing with their credit score after bankruptcy. If people in your similar situation are enjoying a 700 score within 4-5 years after filing and obtaining a discharge, then you can reasonably hope for the same result.