“Credit Scores Improve Immediately After Filing for Bankruptcy.”

That’s from an October 2024 consumer bankruptcy study done by Lending Tree. The average person saw their credit score increase from 533 to 602. (This matches two studies, in 2014 and 2015,  done by Federal Reserve banks.)

Some people–the people with the worst scores going into bankruptcy–saw an improvement of up to 193 points!  Generally, those with credit scores below 620 saw an increase when they filed bankruptcy. People with scores above 620, usually saw a drop.

Most people with a credit score around 640 see a drop to around 630.

People with scores around 650 fell to around 640. High scoring individuals, with scores around 700, fell to around 665.

Most people with a 640 score leave bankruptcy with a credit score around 630.

These are averages. Your score will be influenced by your complete credit history during at least the last three years. So everyone is different. But we can say two things with confidence.  If you still have a decent credit score, bankruptcy doesn’t hurt much. If you have a terrible score, it will help a lot.

No problems getting new credit cards

The Lending Tree study shows that people have most no problems getting new credit, in the first two or three months after bankruptcy.

Find Out More

You can find out more about the five ways bankruptcy gives you a new start.

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