Reader Question: How Many Points Will My Credit Score Drop After a Bankruptcy?

I love answering reader questions! Today we got a great email from a reader named Murry, asking about the impact of filing for bankruptcy:

Hi, my wife and I would like to know how many credit score points are removed for bankruptcy? Thanks for responding!

 This idea of credit score "points" is a common misconception. In reality, it is nearly impossible to predict the credit score impact of filing for bankruptcy without knowing a lot more about the consumer's credit history. So many factors are used to calculate a credit score, it's not a simple matter of a bankruptcy being "worth" 50 points or a late payment being "worth" 10 points.

Basically: if Murray currently has very high scores, he could see a drop of as much as a few hundred points. If his credit scores are very low, he might see only a very small drop. Either way, filing for bankruptcy will leave him with credit scores that are very low.

This is only a rudimentary explanation though. When you file for bankruptcy several things happen to your credit history. A new public record appears and your discharged debt accounts are marked as being included in the filing. Each of these changes can have a unique impact on your credit scores. One quick way to estimate the credit score impact is by using Credit.com's free Credit Score Estimator tool.

Bankruptcy filing records remain on credit reports for 7-10 years. Once the filing is discharged completely, Murray should be able to start the credit score rebuilding process with a secured credit card or small loan. If he works hard at rebuilding his credit post bankruptcy, he may be able to get a large loan within a few years.

Next question? Send your credit, debt, personal finance and budgeting questions to our team of experts at tidbits@credit.com.