Why Fear Of Lowering your Credit Score Shouldn’t stop you from filing bankruptcy

How Does Bankruptcy Affect Credit Scores? 

The way in which bankruptcy will affect their credit scores stops people from filing for bankruptcy. The fact is that their credit scores are already being affected because they are missing payments, and they have several open accounts. 

It is true that bankruptcy will cause your credit scores to go down, but it usually isn’t as bad as you are expecting. You aren’t going to notice how much your credit scores go down after filing for bankruptcy. That’s because your scores are already low. After a bankruptcy, your debts will be discharged, and your credit will have a chance to recover. 

Bankruptcy means that you are being given a second chance to put your finances in order again. If you refuse to file for bankruptcy, it can end up hurting you later. Not filing keeps you in a difficult financial situation and allows your credit to continue to take hits. A bankruptcy can stop this process altogether. 

People are concerned that a bankruptcy remains on their reports for 10 years. Even so, tax liens and judgments will be removed after seven years have passed. In most cases, these things can be removed even earlier. As each one of these negative marks comes off of your credit reports, your credit scores rise. If you put an effort into rebuilding your credit, your scores will increase even faster. 

Factors that Impact Your Credit Scores 

The Bankruptcy Appears on Your Credit Reports. 

This is true for 10 years, but you will begin to rebuild your credit long before this time is up. 

Your Credit Reports Show Less Debt. 

A positive that occurs with a bankruptcy is the fact that your credit reports will show less debt. These will be discharged in bankruptcy and removed from your reports within a couple of years. After the debts are gone, your credit scores immediately improve. 

You Have an Improved Credit-to-Debt Ratio. 

Your credit utilization rate will improve after your debts are discharged because you will be carrying less debt. 

A Bankruptcy Will not Stop You from Getting a Loan or a Credit Card. 

If you want to rebuild your credit, the best thing you could do is apply for a credit card. One option for you is a secured credit card. This is a credit card that requires that you offer a deposit, but it will work exactly like a traditional credit card. It is easier for you to be approved for secured credit cards, so it is your best option. 

Bankruptcy doesn’t stop you from being approved for a loan. Credit builder loans require that you place something as collateral, but as you repay these loans, they increase your credit scores. Because of the collateral, this type of loan isn’t as risky for the lender, and you can qualify for it with a bankruptcy on your credit reports. 

If you are considering filing for bankruptcy, you must hire bankruptcy lawyers Cincinnati from the law office of Barr Jones and Associates. Your Cincinnati bankruptcy attorneys can explain in even more detail how bankruptcy affects your credit scores. Your bankruptcy lawyer Cincinnati can advise you on how he or she can help you minimize the effects of bankruptcy. 

A Cincinnati bankruptcy attorney can also explain the ways that you can increase your credit scores. Your Cincinnati bankruptcy lawyer can help you make plans that will benefit your credit reports and your scores. A bankruptcy lawyer in Cincinnati will move you in the direction of a better financial future. Contact us today so that we can help you improve your finances.