Most of our clients see a 720 Credit score only 2 years after bankruptcy. Just follow these any combination of these 4 easy steps to improve your credit score after bankruptcy.  Bankruptcy is a legal process that makes debt go away, and credit score measures how regular payments towards debts have been.  Often, in the time before bankruptcy, people are not paying their loans on time so they already have a bad credit score, and the bankruptcy filing stops the score from getting worse.

A BANKRUPTCY FILING LAYS THE FOUNDATION FOR GOOD CREDIT

When you file bankruptcy, the bankruptcy itself is a negative remark on your credit report, but it stops all sorts of negative reporting from going on your credit report.  Normally, when a loan isn’t paid on time every month that loan gives you a negative remark for late payment or for collections.  That is a negative remark EVERY SINGLE MONTH.

After bankruptcy, it is illegal to attempt to collect debts.  That means it’s illegal to write negative things on credit reports.  Thus, after bankruptcy there will be no new negative remarks on the credit report.  The late payments from before the bankruptcy filing day will continue to show as late, because they were from before the filing date of the bankruptcy.

After the filing day, it will look like nothing is going on with your loans at all.  They should all be showing as $0 balance discharged in bankruptcy.

START NEW PAYMENT HISTORY AFTER BANKRUPTCY

A good credit score requires a history of paying things on time.  The credit reporting system is made by banks and credit unions and other money lenders.  They want everyone to be accustomed to paying debt every month.  They will reward you for making debt payments all the time with more credit.

The older the loan you are paying on, the better.  These 4 options give you ways to get loans onto your report and showing current so that you are rebuilding your credit.

1.  Reaffirm a car or house loan.  With car loans and mortgages you get the option to keep paying them and keep the collateral after bankruptcy, or to stop paying, give back the collateral, and owe nothing.  It’s your choice!  If the car or house is in good condition and the loan isn’t a bad deal, then you can reaffirm the loan and keep the collateral and the payments will start to appear again.  Please note, US Bank does not report payments in this situation and cannot be forced to do so legally.
2. Get a new car loan.  Car loans are the first type of loan you can get after bankruptcy.  Most people that file with Walker & Walker get dozens of envelopes with car loan offers in the mail within weeks of filing.
3. Take out a secured credit card.  Capital One and Discover will both you give you Secured Credit cards right after filing to help build credit.  They don’t have fees and you don’t have to carry a balance and pay interest on them.
4. Make yourself the authorized user on an old credit card of a friend or family member.  This works better with an older account.  Be careful, though because if the primary account holder keeps a high balance or misses payments on it, then your credit will get dinged for the acts of the primary account holder.

Want to know more?  Then watch the youtube video below.  It also has links for how to sign up for the two secured cards.

Walker & Walker follows up with you after filing to make sure your credit score is improving.  We review your credit reports for free and dispute any inaccuracies, and also send you things about how to build credit and where to go for good loans.

When you have lots of debt, bankruptcy is actually usually GOOD for the credit score.

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