What is OPEN bankruptcy? Why is my credit score above 650 even though I filed Ch.7 Bankruptcy over 1 year ago?

Question

I filed for Ch. 7 bankruptcy 14 months ago. But my credit score is now above 650. Why is my credit score not low or poor even though I filed for bankruptcy Chapter 7 14 months ago?

Answer 1

With years in the credit business

One of the fairly unknown joys of BK!!!

Credit scores are based on your credit as of today. When you pay your bills on time after a bankruptcy and have established a few good trade lines, your score remains faily decent.

Usually people who paid their bills on time before the BK and afterwards will see a score about this or higher within a year or two after the event.

Scores are based on a host of different inputs, not just one event in time. A score measures your credit risk, and if you are fairly responsible, but had a credit mishap, then your score will recover quickly.

I have seen this happen many, many times and this is why I recommend people dispute bad info on their credit reports post BK. Make sure your discharged debtors all indicate not-late as of the date of your filing. They are required to stop reporting your lates as of this date. If you see lates, send the entire BK filing plus the judges discharge order to each credit bureau and tab the pages that demonstrate these debts were included.

You'll likely see your score increase further!

Best of luck!

Answer 2

FICO scoring is a weird thing. When you filed BK, your filed is lumped with others who also filed BK. So your score is relative to your "group". When it drops off, your score may drop, because you will be considered with those persons who don't have a BK showing on their reports.

BK is just one aspect of your report. The FICO scoring model takes into account a number of factors. While the BK is a black mark, it is not the end of the world credit wise. You can even get an FHA mortgage 2 years out of BK.