Bankruptcy

VantageScore code numbers

Code numbers can differ by bureau and score version. The wording of the statement is what to match.

What puts this reason on your score

VantageScore's explanation says bankruptcy is a proven indicator of risk with future payments and causes a significant drop in your score. The filing shows in the public records section, and lenders can mark each account that was part of it as included in bankruptcy.

Watch the numbers. In VantageScore 4.0, 88 means bankruptcy. In 3.0, 88 is a public record that's too recent and bankruptcy is 98. Reading the wrong list sends you looking for the wrong problem.

What to check on your credit report

• The filing date and chapter in the public records section
• That every account in the bankruptcy shows a $0 balance and no late marks after the filing date
• That any debt you reaffirmed and kept paying shows those payments

What you can do about it

• Dispute any discharged account still showing a balance or a past-due amount.
• Open or keep one or two accounts you can pay in full every month, such as a secured card, to build new history.
• Keep any reaffirmed loan perfectly current.

The free drop off calculator can help with this step.

How soon a change can show

A Chapter 7 can stay up to ten years from filing, and TransUnion removes a Chapter 13 seven years after filing. New on-time history reported each month starts working long before either date.

If you are applying for a mortgage

The waiting period for your loan program decides when you can apply after a bankruptcy, and the score sets the price after that. Use the waiting time to build at least a year of clean history on new accounts.

Guides that go deeper

• Rebuilding credit after bankruptcy: the first 24 monthsWhat your report should look like after a bankruptcy discharge, which accounts to open first, which offers to ignore, and how long the record stays.
• Chapter 7 vs. Chapter 13 on your credit report: the timeline differenceChapter 7 can stay on your report 10 years, a Chapter 13 usually 7, both from the filing date. How each one reports, and how mortgage rules treat them.
• Mortgage waiting periods after bankruptcy, foreclosure, or short saleFHA, VA, USDA, Fannie Mae, and Freddie Mac waiting periods after Chapter 7, Chapter 13, foreclosure, short sale, and deed in lieu, with sources and start dates.
• How secured credit cards workHow a secured card's deposit, limit and bill fit together, what scoring models see, how small limits inflate utilization, and how to get your deposit back.
• What your credit score reason codes are telling youReason codes list what held your score back the most, in order. What the common ones mean, which you can act on, and which to leave alone.