Many financial experts tout a significantly lower credit score as the main reason for people needing to avoid bankruptcy, but not everyone sees a big drop in their score after their paperwork goes through the courts. In fact, a person’s individual circumstances determine how much his or her credit score is affected by their bankruptcy filing.
Although the exact formula that each credit bureau uses to compute a credit score is a closely held trade secret, filing for bankruptcy can lower a credit score by as much as 300 points
Nonetheless, it can be difficult to exactly predict how far a credit score will fall. People who close only one or two accounts will often see their score drop less than someone who closes multiple credit card accounts. If an individual still has some credit being extended to them, it usually means that creditors have noticed improvement in payment history.
Even if your credit score does not fall significantly, a note is placed on your credit report that states you have gone through a bankruptcy. All potential creditors will be able to see that you have gone through a bankruptcy for the next eight years and may consider this to be a positive since you are starting with a clean slate.