Facts About Repairing Your Credit Score After Bankruptcy —
Many people worry about how filing bankruptcy will affect their credit score. However, by the time most people decide to file bankruptcy, late payments, charged off accounts, and repossession have already lowered their credit score. Most of our clients wipe out twenty to thirty thousand dollars in unsecured debt and actually see their credit score go up 75 points within a year! Filing bankruptcy actually helps you improve your credit score and rebuild your credit history much faster than waiting years for negative accounts to fall off your credit report.
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Improving Your Credit Rating Is Easier Than You Think
Even though your bankruptcy filing will remain on your credit report for six years after you are discharged, you are exiting bankruptcy debt-free. The fact that you do not have any debts makes you much more attractive to some lenders. You may pay higher interest rates initially; however, you will be able to rebuild your credit after bankruptcy.
Below are five ways that you can begin to repair your credit rating as soon as your bankruptcy case is closed.
- Apply for a secured credit card – You will be required to place a cash deposit with the lender in order to secure the charges on the credit card. If you deposit $300, your credit limit will be $300. Use the card often, but do not pay the balance in full each month. By making monthly payments, you improve your payment history by demonstrating you can make timely payments.
- Buy another vehicle – An installment loan is a great way to improve your credit rating and repair your credit report. You may pay a little more in interest until your credit score improves; however, making payments on time each month on an installment loan is a quick way to improve your credit score.
- Apply for a store credit card – Store credit cards (i.e. furniture stores, department stores, etc.) are easier to get than major credit cards. Keep your balance below 30% of your credit limit and pay on time each month to help repair your credit after bankruptcy.
- Get a mortgage using an after bankruptcy lender – Since you are debt free, you may now be able to afford to purchase your home. There are lenders who will work with you to obtain a mortgage even after filing bankruptcy. Again, the interest rate may be a little higher; however, you can refinance once your credit score has improved.
- Obtain a traditional loan with a co-signer – Having a co-signer will decrease the interest rate that you must pay for new loans. However, if you default on the loan, your co-signer will be responsible, so make sure that you are able to make all payments on time to avoid hurting the co-signers credit.
Schedule Your Free Consultation with a Mount Holly Credit Repair Attorney
There is life after bankruptcy. If you are ready to take control of your financial future, please give our firm a chance to help. With our bankruptcy, debt consolidation, and credit repair services, we are sure to have a solution that works for you.
We offer confidential consultations during normal business hours, on weekends, and after-hours, too. Just call 609-267-5297 to speak with a Mount Holly credit repair attorney today, or use our simple online contact form to schedule your free consultation.