Does the penalty for BK decay over time or just fall off all at once when it drops off the CR?

[vic6string]

I know many creditors will begin overlooking bankruptcies after a certain period while they are still showing on your file (example: Amex appears to be ok with bankruptcies at the 5 year +1 day mark from the filing date). My question is more on the effect of the BK on your score itself. Does your score slowly get better year after year, or at certain points such as the aforementioned 5 year mark, or does the penalty basically remain the same until the day the BK falls of your report (the 7 or 10 year mark) giving you one huge boost?

I'm just a couple of months from the 5 year mark on my 13, so I am looking forward to being able to finally make an attempt on an Amex BCP, but am curious as to whether or not I can expect my score to make a little jump around that time.

[Shooting-For-800]

Both. Score goes up but then it will max out until drop off.

Should be be able to get up to around 750 before fall off.

5 years from file date or discharge date?

[vic6string]

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@Shooting-For-800 wrote:

Both. Score goes up but then it will max out until drop off.

Should be be able to get up to around 750 before fall off.

5 years from file date or discharge date?

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5 years from file date. I actually don't even believe the discharge date is shown on credit reports (or at least I haven't noticed the discharge date anywhere). Since most 13's have at least a 3 year payment period, once you get the final discharge you are already half way to it dropping from your reports.

[Anonymous]

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@vic6string wrote:

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@Shooting-For-800 wrote:

Both. Score goes up but then it will max out until drop off.

Should be be able to get up to around 750 before fall off.

5 years from file date or discharge date?

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5 years from file date. I actually don't even believe the discharge date is shown on credit reports (or at least I haven't noticed the discharge date anywhere). Since most 13's have at least a 3 year payment period, once you get the final discharge you are already half way to it dropping from your reports.

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The discharge date is shown on the more detailed, reports that lenders get (and that you can also get from annualcreditreport.com). Citi I know from personal experience has referenced my discharge date in a denial letter.

Im fascinated by your question because I have been trying to find the answer for 6 months.

[Shooting-For-800]

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@vic6string wrote:

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@Shooting-For-800 wrote:

Both. Score goes up but then it will max out until drop off.

Should be be able to get up to around 750 before fall off.

5 years from file date or discharge date?

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5 years from file date. I actually don't even believe the discharge date is shown on credit reports (or at least I haven't noticed the discharge date anywhere). Since most 13's have at least a 3 year payment period, once you get the final discharge you are already half way to it dropping from your reports.

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Yep.  A lot of people don’t know that.

[Anonymous]

Slight amendment to your first post OP - Amex is 5yrs and one month after BK - give it the extra 30 days. My understanding/inference is that it’s that time period after discharge, not after filing, in order to get a card (may be mistaken but discharge date makes more sense as that’s when the BK process is complete).

[vic6string]

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@Anonymous wrote:
Slight amendment to your first post OP - Amex is 5yrs and one month after BK - give it the extra 30 days. My understanding/inference is that it’s that time period after discharge, not after filing, in order to get a card (may be mistaken but discharge date makes more sense as that’s when the BK process is complete).

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I was going to give it the extra month anyway because one of my 3 inquiries will be a year old a month later so I was going to milk those couple of points. While I agree that using discharge dates makes more sense, they do in fact go with filing dates. 

[Anonymous]

Interesting - as I said I wasn’t sure but thank you. Stating it explicitly will definitely help others down the road. I’m glad you were giving it the extra month - there are many DPs here of people being reflected at 5 years, and then approved a month later. Best of luck and hopefully we’ll soon be seeing your approval threads

[kxkxkxx]

I have gone through a full cycle of a BK....your score slowly grows over time...the 2 yr mark seems to be when most creditors no longer care...that's because you cannot do another BK for 7 years, so they know they will collect....after the 5yr mark, it seemed to go dead...once it fell off, there was no big "boost" since over the years it slowly became less of a negative.

[gdale6]

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@kxkxkxx wrote:

I have gone through a full cycle of a BK....your score slowly grows over time...the 2 yr mark seems to be when most creditors no longer care...that's because you cannot do another BK for 7 years, so they know they will collect....after the 5yr mark, it seemed to go dead...once it fell off, there was no big "boost" since over the years it slowly became less of a negative.

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Interesting, I had a clean profile at the time my BK7 was dropped and my Fico 8 went from 739 to 805 at the time. Its always possible if you had a very thick profile of new credit post the filing at the time it was removed. I did not have such.