Credit Score After Bankruptcy

A credit score after bankruptcy will be lower than it was before the debt problems that brought about going bankrupt in the first place, but it isn't a permanent blot on one's rating. By law, a bankruptcy must appear in a record for ten years, but not every creditor will refuse lending because the applicant has filed Chapter 11 or 13. The importance of scores vary from one lender to another, so the rating probably won't keep the applicant from buying the car they want, or the appliances needed. Despite a low rating, many online companies advertise a willingness to extend lending to consumers regardless.

Automobile agencies seem proud of the fact they will extend loans to anyone, no matter what their financial history. The one thing that is probably a universal truth is that a higher interest rate is associated with a lower credit score after bankruptcy. However, the longer the consumer continues to pay debts responsibly after going bankrupt, the surer they can be that their rating will climb back up, possibly better than before. A bad rating may lead to trying to do some financial repair in other areas. "Who can understand his errors? cleanse thou me from secret faults" (Psalm 19:12).

Copies of one's financial reports from all three credit reporting companies, Equifax, TransUnion, and Experian, are available without charge once a year. When the consumer has received the free copies of the reports and purchased a credit score after bankruptcy, the consumer must check them over carefully. If there are any negative items which do not belong there, it's best to write to the reporting company explaining objections, then write to the creditor with copies of any documents to prove the point.

Filing for Chapter 11 or 13 either gets rid of all debt or sets up a plan for paying creditors back a percentage of what is owed. If the consumer has a plan to pay back creditors, the record of payments will go a long way toward raising their rating. When future lenders see how that borrower is paying the previous lenders back on a timely basis, the numbers will begin to rise. A credit score after bankruptcy is an important number, but it's temporary. The farther away one moves from the Chapter 11 or 13 action, the better the rating will become, so the consumer can be optimistic about the future even when going bankrupt was a part of the past.

For more information: http://www.christianet.com/creditreports