Question
Last year you filed for bankruptcy. This was the result of not being able to pay your bills. Based on this bankruptcy,how will your credit score be impacted? Choose 1 answer: A Your credit score will be negatively impacted. B Your credit score will be positively impacted. C There will be no impact on your credit score.
Answer
4
(339 Votes)
Evelyn
Professional · Tutor for 6 years
Answer
### A. Your credit score will be negatively impacted.
Explanation
## Step 1: Understanding Credit Scores### Credit scores are numerical expressions based on an analysis of a person's credit files, representing their creditworthiness. They are primarily based on credit report information sourced from credit bureaus.## Step 2: Impact of Bankruptcy on Credit Scores### Bankruptcy is a legal process that can severely impact a person's credit score. It is considered a negative mark on a credit report.## Step 3: Duration of Bankruptcy on Credit Report### Bankruptcy filings typically stay on a credit report for seven to ten years, affecting the borrower's ability to obtain new credit during this period.## Step 4: General Impact of Bankruptcy### Generally, bankruptcy significantly lowers a person's credit score as it indicates to lenders that the debtor has been legally declared incapable of paying off their existing debts.