Consult With Denver Bankruptcy Lawyers Wink & Wink to Learn How You Can Improve Your Credit Score After Bankruptcy
You may be worried that filing for bankruptcy will completely ruin your credit score.
If you’re already in need of debt settlement and considering filing for bankruptcy, will it just make your financial situation much worse? Will lenders never loan you money or issue you a credit card again?
The truth is, filing for bankruptcy will negatively affect your credit score if you have good credit. In that case, your credit score may take a hit when you file bankruptcy. However, if your credit score is already bad, filing for bankruptcy can actually improve your credit score in the near term.
Regardless, filing for bankruptcy can give you the opportunity to build back up your credit score over time.
In fact, bankruptcy may be just the thing to actually help your credit score in the long run and get you back in good financial shape faster than if you hadn’t filed for bankruptcy.
How Can Bankruptcy Help Your Credit Score?
Chances are, if you’re in a bad financial situation, you’re already missing payments and accruing lots of overwhelming debt. Angry creditors are calling you. Your credit cards are getting maxed out and declined. Right then and there your credit score is already taking a big hit.
Your credit score is, after all, based in part on your payment history. Pay your bills in full and on time, and you’ll build up nice credit. Fall behind and miss payments, and your credit score will drop and drop.
If you file bankruptcy, this fact will be included on any credit reports for 10 years but its impact on your credit will not be nearly this long.
This is because your credit will start to get better after bankruptcy. If you file Chapter 7 bankruptcy, you credit can start to improve when discharge enters, which is typically 6 months or so after filing. In Chapter 13 bankruptcy, your credit score can start to improve when your plan is confirmed, which tends to be 3 months or so after filing.
After filing either Chapter 7 or 13, you can be eligible for a refinance within 1 year of filing bankruptcy and you can be eligible for a new purchase mortgage in 2 to 3 years. It is also possible to have a 700+ credit score within two years of filing bankruptcy.
Your credit score improves after bankruptcy because it becomes a lot easier to pay off bills in full and on time when you no longer have a mountain of debt weighing you down, making it impossible.
If you’re in need of debt settlement, it’s important you speak with a bankruptcy attorney near you. Wink & Wink is a bankruptcy law firm based in Denver, Colorado, with years of experience helping clients get back on their feet financially.
How to Improve Your Credit Score After Bankruptcy
After bankruptcy, you can have a fresh start in your financial life. To achieve the fastest improvement to your credit, you should focus on the following:
- Pay all bills in full and on time. You likely will have debt that survives bankruptcy, like student loans, a car loan, or a mortgage. You should set up automatic payments or come up with a great calendar system so you’re on top of these things and never miss or even make a late payment again.
- Maintain a budget. Now that you’ve been given a fresh start after bankruptcy, it’s crucial you stick to a budget so things don’t get bad again.
- Get a secured credit card. A secured credit card is a credit card where you first deposit the money as collateral and then get a card for that amount. Each month, be sure to pay off your bill in full, and don’t ever max out the card. Keep showing that you can make all payments. This will help improve your credit score to the point where you will become eligible for a regular credit card.
- Keep an eye on your credit score and credit reports. Make sure your credit score is continuing to improve thanks to your on-time and complete payments. Review credit reports to ensure all payments and credit activity are being reported. You want lenders to see you’re doing a great job. You can view your credit report for free once each year at www.annualcreditreport.com.
If you’re struggling with out-of-control debt, it’s time to speak with a debt settlement attorney, such as bankruptcy lawyers Wink & Wink. They’ve helped clients in Colorado get back on track to building up great credit again.
Speak With a Bankruptcy Attorney Today
Filing for bankruptcy is a stressful, daunting experience. But a skilled bankruptcy law firm will help it go much smoother and help you get the outcome you so desperately need. Speak with Denver-based bankruptcy attorneys Wink & Wink today so you can soon begin building up a great credit score again. Call 303-410-1720 or contact us online now.