Posted on: 27 April 2016
Filing Chapter 7 bankruptcy can be a huge help if you are in debt, and this filing will remain on your credit report for 10 years. While this is a long time, you should know that this does not mean you will not be able to get credit lines or loans for the entire time. Here are several things you can do to help improve your credit score after bankruptcy so you can get approved for a credit card or loan faster.
Effects of Chapter 7 on your credit
As soon as you file for Chapter 7, the bankruptcy court will post a public record on your credit report, and this will typically cause a credit score to decrease by 160 to 220 points. There is nothing you can do to change or prevent this from occurring, but you can start rebuilding your credit immediately after filing.
If you start working on your credit right away, you will have the ability to improve your credit score faster. One of the best ways to rebuild credit is to dispute any inaccuracies on your credit report. Another good option is to get a credit card or loan to start rebuilding positive credit history.
Things to know about credit cards
To get a really good credit card, you will most likely need a credit score of 720 or higher, but there are credit cards that offer approvals for score under this. One of the best ways to begin is to apply for a secured credit card. This requires placing money in a bank account with the credit card company, and in return they will give you a credit card. If you do this and start using the card and repaying it on time, your credit score will improve. Once your credit score gets better, you can start applying for regular credit cards.
Things to know about loans
Getting a car loan will not be difficult to do after bankruptcy; however, you will pay a higher interest rate for your loan. In most cases, you will also be able to get a mortgage loan two years after you file. Of course, you will have a better chance of getting approved for any type of loan if you have a decent credit score. This is why you should immediately begin working on your credit after filing for bankruptcy.
For more information, contact Arthur M Richard or a similar legal professional.Share