Filing for Bankruptcy Could Help your Credit Score in the Long Run

[bobbyw24]

Filing for Bankruptcy may hurt your credit less in the long term than making late credit card payments. Reason: About 35% of your credit score is based on your payment history. If you file for bankruptcy while you still have a fairly decent credit score because you have been making payments on time, your score will be easier to repair than if you file with bad credit caused by missed payments.


Taken From a quote in Smart Money by Barry Paperno, consumer operations manager FICO---Reported in BottomLine Personal December 15, 2009 issue

See also:

Declaring Bankruptcy Can Improve Your Credit Score

http://www.smartmoney.com/personal-...nkruptcy-can-improve-your-credit-score-20681/

 

[cpike]

If by "in the long run" you mean 30-40 years down the road, maybe, but were I work I have NEVER seen anyone approved for financing who has filed for bankruptcy.

 

[bobbyw24]

If by "in the long run" you mean 30-40 years down the road, maybe, but were I work I have NEVER seen anyone approved for financing who has filed for bankruptcy.

No--more or less 1-3 years depending on your situation 9are you employed, do you own a home, etc)

 

[Zippyjuan]

If you have a really bad credit score then maybe it will help but it is my understanding that a bankruptsy stays on your report for at least seven years http://www.experian.com/disputes/faq.html so it will be at least that long before you can take advantage of the higher score and if you have been good in that time, even without bankruptsy your score should be higher anyways.

On the other hand if you are in a situation where you are unable to pay bills and falling further behind you probably should declare bankruptsy before you deplete all your assets and savings- cut your losses before you lose everything anyways.