Our Denver Bankruptcy Attorneys Clear Up the Biggest Myths About Your Credit Score
Your credit score: most of us know we want a good one, ideally in the 700-to-800 range, and when we access our credit report online, we eagerly look for that little lever to shoot over to the green side – but what does a credit score really mean?
In short, a credit score is calculated by credit-reporting agencies, such as EquiFax, Experian, and TransUnion. The score these bureaus provide reflects an analysis of how likely it is that you’ll be able to repay borrowed money. It is largely determined by your payment history in the past, as well as current credit balances.
Your score helps lenders check how risky or viable it is to lend you money. The higher your score, the more likely you are to get better loan terms. When your score is lower, you represent risk to a lender, so higher interest rates may apply – or your request for a loan could be rejected altogether.
You can easily check your score online. Free credit score checks are available from a variety of websites, and – contrary to popular belief – using them doesn’t hurt your credit score. In fact, it can be useful to regularly check your score to see where you stand. The only time checking your score can affect the number is if a lender is checking it to decide whether you are a desirable borrower, called a “hard pull.” Much like the confusion about whether checking your own score hurts your credit, there is a wide range of information online about credit scores, much of which is misleading.
However, if you’re concerned about a low score, and you’re struggling to pay back debt, Wink & Wink, the premier team of debt consolidation lawyers and bankruptcy attorneys near you can clear up the myths about credit scores and provide you with sound, effective options for debt settlement, including bankruptcy.
Our Leading Team of Bankruptcy Attorney Can Help Increase Your Score – If You Don’t Believe the Myths
A strong, premier team of bankruptcy lawyers are the key to future success for those struggling with debt – if you rely on their legal expertise. Truly effective teams offer debt settlement options and more and can clarify the many confusing statements about credit scores that exist online.
If you’re struggling to pay back credit cards, medical debt, your mortgage, and more, a bankruptcy attorney or debt settlement lawyer could help you resolve your struggles and begin improving your credit score. First, let’s reveal two credit score myths and one major truth, so you can better understand your options.
Myth #1: Bankruptcy and Debt Settlement Are Ultimately Bad for Your Credit Score
The only action that is truly bad for your credit score in the long run is doing nothing. Not paying your debt and not resolving it with a debt settlement option will absolutely tank your score and keep it in the tank for an extended period of time.
On the other hand, while some believe that filing for bankruptcy or settling your debt is a negative, our team of bankruptcy attorneys near you view this debt solution more like medical care. Say you’re sick, and you need surgery. An excellent doctor will provide the most powerful medicine and technology available to heal you. When you wake up, you’ll be in some pain and there may even be a scar. Soon, however, the pain will subside, the scar will begin to fade, and you’ll be well again – and perhaps better than ever. While the surgery was no fun, it enabled you to get better.
Bankruptcy is very similar. At Wink & Wink, we apply our expert care and knowledge to your debt situation. While it may be difficult to go through bankruptcy proceedings, you can potentially find yourself with a credit score of 700, and you’ll also be a strong candidate for a mortgage within two years of filing.
Therefore, taking action now can make your situation much better. Although worries and fears are entirely understandable, a “head-in-the-sand” approach to your debt won’t allow you to see any changes. The longer you go without a solution, the more difficulties you’ll likely experience. Inaction, unfortunately, can never improve your situation. The only way through is to get through it. Wink & Wink can help you navigate it, thanks to our patient, compassionate, and strategic legal approach. It’s just one reason that we’re the exceptional choice among the many bankruptcy and debt consolidation lawyers in Denver.
Myth #2: Sometimes a High Credit Score Doesn’t Reflect Reality
For Denver residents with a very high debt to income ratio – but who manage to make payments on time – a credit score may look okay. However, that score typically does not reflect reality. You can be making minimum on-time payments on credit cards, but there is no logical way that these cards can be fully paid down using this method. And when lenders look at your high debt-to-income ratio, you won’t qualify for loans in the future. Eventually, something will have to give; your limited income stays limited because of all the bills piling up.
Your score may not reflect this, but your creditworthiness is undesirable to a lender because of your debt to income ratio. Creditors will notice your method for making small payments and the amount of money you truly have on hand. Unless you pay more than minimum payments, your debt to income ratio will keep you from obtaining a mortgage or refinance.
If you are beginning to struggle with debt by being able to only make minimum payments, but you’re narrowly avoiding a crisis (for now) things may seem okay, but it is important to get your debt under control before there’s far more trouble. When the amount you owe becomes unmanageable and small strategies for putting a bandage on your debt no longer work, you’ll need a more rational, strategic approach – and a bankruptcy attorney near you at Wink & Wink can provide that solution.
If you hire a debt consolidation lawyer and get out of debt for less than you owe with an excellent debt settlement option such as bankruptcy, your credit score may dip temporarily. However, as we stated when debunking the first myth above, two years later you could be out of debt and boasting an appealing credit score.
A Free Consultation from Our Expert Team of Bankruptcy Attorneys Is Your Key to Financial Freedom and a Higher Credit Score
When you schedule a free consultation with our bankruptcy attorneys near you, we will carefully listen to your story and your needs. Then, we’ll devise a debt settlement option that will set you on a path to debt relief – and a credit score that truly reflects the actions you’ve taken to move away from debt to a strong financial future.
We look forward to helping you navigate bankruptcy or debt settlement today. You deserve to thrive without worries that you won’t be able to pay off your debt. The role of an excellent lawyer is to guide you every step of the way and position you strategically for a promising and long-lasting outcome.