Filing bankruptcy not only discharges your debt, it can also help in reducing the amount of debt on your credit report. Once credit bureaus receive the information regarding your new lack of debt, they will immediately update your credit information. This lack of debt will actually lower your credit score under the current system of credit scoring. A lower credit score can improve your chances of working with lenders in the future. However credit scores are not the only factors in a lenders decision.
Of course, most lenders require a stable source of income and the ability to repay the debt. But, they may also require you to have collateral, such as a car or home. Having such collateral can improve your chances of obtaining credit approval after a bankruptcy discharge. No law state or federal prevents a lender from approving your loan or credit application after filing bankruptcy. The decision lies with each lender based upon their own standards and guidelines regarding lending practices.
For more information on how credit bureaus score a Bankruptcy filing, contact the credit bureaus. Try: www.equifax.com