When you make the decision to file for bankruptcy, it can give you a fresh start by eliminating most of your existing debt. Bankruptcy protection can help to stabilize your life, and can also help you raise your credit rating. In this blog we explain how to raise your credit score after bankruptcy.
Can I Raise My Credit Score After Bankruptcy?
Although bankruptcy penalties last between 7 and 10 years, the “weight” of these penalties will decrease over time. Credit penalties you face after bankruptcy can be offset. In fact, if your score drops to 550 or lower, it can be recovered in as little as 12 to 18 months. While your score might not be as high as it once was, you will still be able to get your finances back in order.
Because some people who are on the verge of bankruptcy already have poor credit due to late payments, high balances, and charged off accounts or collections accounts, filing for bankruptcy might actually increase their credit score.
When a person files for bankruptcy, many of their collections and high balances will be wiped clean, which can potentially increase their overall credit score. According to a spokesman for Fico Scores, after bankruptcy, a person’s score is determined by comparing it with other people who have filed for bankruptcy. Because of this practice, certain credit scores will go up after bankruptcy.
Speak to our Bankruptcy Attorneys
Are you thinking about filing for bankruptcy to get relief from your debts? Our team of lawyers are here to guide you through the bankruptcy process and we will ensure that your rights are fully protected. Let us get started on your case today.
Contact us to schedule your free case evaluation with our Worcester bankruptcy lawyers.