Your Credit Score After Bankruptcy
You may be concerned as to what will happen to your credit score after you file for bankruptcy. After your file for bankruptcy your credit score can either increase or decrease depending on your previous credit information. Your credit score is calculated based on the following items
- Your Payment History
- How Much Debt You Owe
- Length of Credit History
- Your Credit Mix
- Credit Inquiries/New Credit
Your Credit History and How Much Debt You Owe
Your credit history and how much debt you owe are the larger percentage of which your credit history is based on. If you are carrying a high debt amount on credit cards and have a bad payment history, a bankruptcy filing may actually increase your credit score. Your credit score may improve after bankruptcy because the balance on the discharged debts are zeroed out and these companies can no longer report to the credit bureaus about your debt. For others a bankruptcy filing will decrease their credit score, but there are a number of things that you can do to improve your credit score.
HOW TO IMPROVE YOUR CREDIT SCORE AFTER BANKRUPTCY
For most people who have filed for bankruptcy, you can improve their credit score to a relatively good level after 2-3 years. You can improve your credit score after bankruptcy by doing the following:
- Obtaining a secured credit card-This type of card requires a security deposit and generally allows you to only use it up to the point of your security deposit. The benefit of this card is that it will be reported on your credit report and can build a positive payment history.
- Make any credit card or vehicle payments on time- If you do obtain a regular credit card or have a vehicle payment make sure that you are paying them on time.
- Dispute any Incorrect Information on Your Credit Report -You may have incorrect and harmful information on your credit report that should not be reported and is hurting your credit score. Dispute any incorrect information that may be harmful to your credit score. You can write a dispute letter to the credit bureaus and indicate the incorrect information that is listed in your information.
- Opening new credit accounts – Although having new credit accounts can help improve your credit score you should ensure that you only utilize these credit cards when you have the money available to pay of the credit card in the same month and not incur any interest or charges.
For information on how your bankruptcy is reported on your credit report go to: How is a Bankruptcy Reported on My Credit Report.
Considering Bankruptcy? – Get Answers to Your Questions
The founder of Southern California Law Advocates (SCLA), Orange County bankruptcy attorney Norma Duenas, is an experienced bankruptcy attorney who graduated from the University of San Diego Law School, Cum Laude. Ms. Duenas has handled hundreds and hundreds of Chapter 7 and Chapter 13 bankruptcy cases – simple and complex.
Attorney Norma Duenas will make time to sit down with you personally if you call and schedule a free and confidential consultation.
If you need further assistance or to schedule a free phone or in-person consultation, please call us at 866-337-7220 or email us if calling us is not practical or it’s after hours.