Bankruptcy can Raise Your Credit Score

We have all heard the horror stories about what bankruptcy can do to your credit rating. Unfortunately, your credit rating is probably suffering from things much more negative than a bankruptcy. If done right, bankruptcy could actually raise your credit score.

Whether your credit rating will qualify for credit with a specific company or a certain utility is very difficult to determine. It will be subjective and completely determined by the underwriting guidelines of the creditor. This is why a straight answer to the question is so hard to find. It may not exist.

From my personal experiences, I know that secured credit, to buy things like cars and houses, is available but it will cost more and likely come from an unconventional source like Lending Tree and not from a bank. Unsecured credit, like credit cards, is available from places like Orchard Bank, but expensive and low limits. It will take some time to develop good terms with credit card companies.

No matter what kind of credit you apply for, someone will have to read your credit report and make a determination if you qualify. Right now, your credit report probably shows some negative references . Each one of these negative marks will count against you. There is also a section of the report dealing with public documents and filings. This is where judgments and bankruptcy show up. These will really count against you because there is less of a chance they are a mistake. However, bankruptcy has a redeeming quality.

When bankruptcy is reported on your credit report, it will count against you. However, you are then able to re-classify all of the other negative reports to “Discharged in Bankruptcy” instead of “Delinquent” or other negative terms. This might take a few letters to the credit bureau, but it will be worth it. You will also be able to classify other judgments the same way. Now you only have one thing counting against you instead of several.

Another way bankruptcy can help is that it will dramatically change the amount of outstanding debt as well as available debt. Too much of either of these is normally a bad thing.

Really good bankruptcy attorneys will offer packages to rebuild your credit. They can explain it and help rebuilt it. Schedule a FREE CONSULTATION with a really good bankruptcy attorney now.