How to Rebuild Your Credit After Bankruptcy
Many people avoid bankruptcy because they have heard the stories of how bankruptcy stays on your credit report for 7-10 years. They believe that this will ruin any chances of ever having a good credit score. Untrue. In fact when you file bankruptcy and receive your immediate debt relief you begin to rebuild your credit. There are more factors involved in your FICO or credit score than just bankruptcy or repossession . The amount of debt you have plays a huge role in the scoring. When you file bankruptcy you have discharged that debt and are able to start the very next day towards rebuilding your credit.
With responsible credit practices you will have rebuilt your credit profile within a year or two. Paying your mortgage on time, paying your auto loans on time, and even getting a secured credit card wherein the payments are made, again, on time all work to improve your credit score. So don’t avoid debt relief measures like bankruptcy just because you are worried about what it will do to your credit score. Your credit score is already low because of your debt to income ratio and missed payments. When you file bankruptcy the debt is discharged and you have a fresh history of payments ahead of you that you can make on time, proving yourself to be a worthwhile risk for future credit.
Bankruptcy isn’t the stigma it used to be-especially in this economy. It also was a right provided to us by our Founding Fathers. People sometime forget that most of our first presidents ended their lives heavily in debt. Good people fall on hard times. Even the best of us.