How does bankruptcy affect my credit score?
A credit score is a number that’s used to summarize your credit history and describe your creditworthiness. Creditors look at a buyer’s score to decide whether your loan should be granted and what interest rate you’ll be charged for.
How a bankruptcy filing affects your credit score depends on what your score is before filing. If you filed bankruptcy while your credit score is already in the tank, it’ll likely take a dip rather than a huge plunge. However, debtors who have a good credit standing are the ones most affected by filing a bankruptcy. You can lose anywhere around 100 to 200 points on your score, and a bankruptcy declaration stays on your record for up to 10 years.
How Can I Rebuild My Credit After Bankruptcy?
After receiving your bankruptcy discharge, you can start rebuilding your credit. Here are a few things you can do to improve your credit score.
Correct credit reporting errors
After getting your debts discharged in bankruptcy, you should make sure that these are reflected in your credit report. You can request a free copy of your three major credit reports and verify that all your discharged debts show up as “discharged” with zero balance dues. You should also do this from time to time to ensure that your financial affairs remain accurate in your report. If you see any errors, we can help you correct them. Errors not corrected in a timely fashion may mean that the creditor reporting agencies and/or creditor might now owe you money!
Get a credit card
Getting a credit card is a good way to rebuild your credit after filing bankruptcy. Credit cards can either be secured or unsecured. A secured credit card requires a deposit that will be applied to your balance due if you fail to make payments, while an unsecured credit card has no deposit required. Paying off your credit card on time helps establish your creditworthiness and can help you get loans for buying a home or purchasing a car later on.
How do I know if bankruptcy right is for me?
At Robert Russell Law Office, we are committed to providing each and every one of our clients with compassionate and trusted representation at reasonable fees. We know that every case is different, which is why we review your situation and discuss both your bankruptcy and non-bankruptcy options with you.
If you’re considering bankruptcy as a debt relief option, contact our office today so we can help you make an informed decision for your financial future.