Study: Credit After Bankruptcy Discharge is Likely

credit after bankruptcy

Study: Credit After Bankruptcy Discharge is Likely

A bankruptcy study recently debunked a myth. You know the one, that bankruptcy will ruin your credit forever. Last week, LendingTree, the largest online lender, released study results about credit after bankruptcy discharge. It followed people after their case was completed. This is consistent with my article asserting that there is indeed credit after bankruptcy discharge.

READ MORE: How to Build Credit after bankruptcy

credit after bankruptcy
Yes, Virginia, there is credit after bankruptcy.

The researchers learned that a credit score of 640 or more was achievable after bankruptcy:

  • one year after bankruptcy for 43 percent of borrowers
  • two years after bankruptcy for 65 percent of borrowers

In fact, the researchers concluded:

People recovering from a bankruptcy are in a similar position to anyone who needs to repair their credit standings. The study finds no indication that people in the aftermath of a bankruptcy will have a harder time accessing credit than their peers who did not file for bankruptcy (except for potential mortgage loan embargos caused by the Fannie Mae policy discussed above). Some people may even find themselves in a much better position to recover, thanks to a reset of their debt-to-income ratios.

See alsoLendingTree’s pointers for how to rebuild credit after bankruptcy discharge. This validates everything we’ve been teaching people, and shows that even if you feel trapped by bad credit, a bankruptcy can provide the fresh start you need.


See also Is There a Debt Limit to Chapter 7