Rebuilding Your Credit After Filing Bankruptcy In Pennsylvania
Having a high credit score is quite important. You can easily obtain loans with lower interest rates with a high credit score. Apart from helping you secure loans with lower interest rates, a high credit score can help you when you’re looking for housing or applying for a job. If you are considering filing bankruptcy in Pennsylvania, you need to consult with an attorney who can explain how bankruptcy impacts your credit score. It is vital to speak to a qualified attorney so they can help you understand how you can rebuild your credit after filing for bankruptcy.
How Will Filing Bankruptcy Affect Your Credit Score?
The credit scores that are widely used are FICO scores, and they range from 300 to 850. A “good” credit score is between 670 and 739. A FICO score of between 740 and 799 is considered “very good,” and a score of 800 or above is considered “exceptional.” Generally, if you have an average FICO score of 680, you can expect to lose between 130 and 150 points if you file bankruptcy. And, if you have a score of 780, you can expect to lose between 200 and 240 points.
As it pertains to how long bankruptcy will remain on your credit report, it depends on the type of bankruptcy you file. If you file a Chapter 7 bankruptcy in Pennsylvania, the bankruptcy will stay on your credit report for ten years. On the other hand, if you file a Chapter 13 bankruptcy, the bankruptcy will remain on your credit report for seven years.
Rebuilding Your Credit After Filing Bankruptcy in Pennsylvania
After filing bankruptcy in Pennsylvania, you don’t have to wait until your bankruptcy is removed from your credit report to start the process of rebuilding your credit. For example, if you file a Chapter 13 bankruptcy, you do not have to wait seven years to start rebuilding your credit. It is best to begin rebuilding your credit shortly after filing bankruptcy. The following are some of the ways you can rebuild your credit after filing bankruptcy in Pennsylvania;
Obtaining a Secured Card
A secured card is one whereby you make a refundable security deposit and then borrow against it. Such a card is a great option to show responsible credit behavior. A secured card can help you see rapid credit improvement if you keep credit utilization low and regularly pay off your balances.
Becoming an Authorized User
After filing bankruptcy, you can ask a friend or relative with excellent credit to add you as an authorized user on their card. If you are added as an authorized user, the account history of that person’s card will be added to your credit report.
Sticking to a Budget
After filing bankruptcy, you should stick to a realistic but firm budget. Your budget should be simple but detailed enough to allow you to track your expenses.
Taking a Credit-builder Loan
A credit-builder loan can help you build your credit without having to meet the requirements for a traditional loan. When you take this kind of loan, the money you borrow is held in a secure savings account while you make payments.
Contact a Pennsylvania Bankruptcy Attorney for Legal Help
At Adam R. Weaver, Esq., our Lehighton & Carbon County bankruptcy attorneys are ready to help you turn your finances around. Contact us today at 570-818-4888 to schedule a consultation and discuss your case.