Have you ever wondered, what is the average credit score after bankruptcy? If you are considering your debt relief options, you will certainly want to know the answer to this important question so you will have somewhat of an idea where your credit rating will end up after your filing. In my experience, having represented several hundreds of clients in San Diego bankruptcy proceedings, most filers tend to end up with an average score that is within a narrow range. Depending on certain factors, you may be in the higher or lower part of that range.
Factors that Affect Average FICO Credit Score After Bankruptcy
Most people will end up with a rating within a specific and narrow range. There are factors that can cause your credit rating to be on the lower or higher end of that range, or even outside the range. If you have a home loan or a car loan and you reaffirm it, the reaffirming of the loan will certainly help you to rebuild your credit than someone who does not have a home loan or a car loan. If you obtain new accounts after your bankruptcy case and practice good spending habits, making charges and paying off your balances at the end of each month, your rating will rise faster. If your credit rating was extremely high before bankruptcy San Diego, then you are likely to enjoy a much higher FICO score than the average credit score experienced by most filers.
Home Loans and Car Loans
Home loans and car loans, if paid in time, will help you increase your credit rating regardless of whether you have sought protection under the bankruptcy laws. Just like a home loan or car loan can help you build credit if you have never had any delinquencies or past due accounts, so too can these types of loans help you to build up your FICO score after filing a bankruptcy case. Therefore, a home loan or car loan that is reaffirmed will tend to cause you to have a higher rating than the average credit score after you file for bankruptcy San Diego.
Just like credit cards help you to build credit from the time that you entered college or university, so too will credit cards help you to build up your credit after a bankruptcy case. The more cards you have, and assuming you pay off your balances each month, then generally the faster you can expect to see your FICO rise.
What Is the Average Credit Score After Bankruptcy?
So back to the million-dollar question: what is the average credit score after bankruptcy in San Diego? With the above disclaimers given, in my experience, most clients will have a FICO score somewhere in the low 600s within one to two years filing and obtaining a discharge, and many clients can obtain a 700 credit score after bankruptcy within about four to five years after filing and obtaining a discharge. So is this good news, or bad news? Well, if you had an 800 score, then a 700 rating is a significant drop. But if your score is in the 400s or 500s, like many people whose credit rating has been lowered due to past due account status, then a 600 or 700 rating it is a big increase, and that’s definitely good news.