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Denver Lawyer Clark Daniel Dray

Rebuilding Credit After Bankruptcy

Credit Repair Attorney in Broomfield, Colorado

Personal bankruptcy filings under Chapters 13 and 7 of the bankruptcy law is not unusual in Colarado. With COVID-19’s impacts on unemployment and business disruption, it is believe that numbers will continue to increase. 

If you’re thinking about filing for bankruptcy in Broomfield, Colorado, you should speak with an experienced credit repair attorney. Bankruptcy provides a fresh start, but the priority shifts to restoring your credit once your case is dismissed. The Law Office of Clark Daniel Drey can assist with both the filing and the issues that will arise in the future and rebuilding credit after bankruptcy.

What is a Credit Score?

A credit score is a number between 300 and 850 that lenders and other third parties use to determine the risk of giving you money. Banks, credit card companies, and other financial organizations use the score to determine if you can or will be able to pay off any obligations you accrue.

A better credit score demonstrates your desire and capacity to repay any loans you may be accepted for based on your current financial situation and previous conduct.

What is a Good Credit Score?

Rebuilding Credit After Bankruptcy

A good credit score is defined as a number between 670 and 850. Lenders may refer to your credit in terms of credit level or credit quality — such as low, fair or average, good, or exceptional — with each category relating to a different range of FICO Scores.

What is a Credit Report?

A credit report is a document that contains details about your credit history and current financial position, such as loan repayment history and credit account status.

The majority of individuals have several credit reports. Credit reporting organizations, also known as credit bureaus or consumer reporting agencies, gather and maintain financial information about you that creditors, such as lenders, credit card companies, and other financial institutions, send to them. Creditors aren’t obligated to report to all credit reporting agencies.

Lenders utilize these reports to determine whether or not they will lend you money and, if so, at what interest rates. Lenders also use your credit report to see if you are still meeting the requirements of an existing credit account.

How Long Does it Take to Rebuild Credit After Bankruptcy?

The time it takes to rebuild your credit after filing for bankruptcy is perhaps the most irritating aspect of the process. Depending on the kind of bankruptcy, the length of time a bankruptcy remains on your credit record varies. Beyond that, whether a borrower makes deliberate measures to enhance his credit score is a significant factor in the credit repair process.

How Long Does it Take to Rebuild Credit After Chapter 7 Bankruptcy?

For ten years, a Chapter 7 bankruptcy remains on the borrower’s credit report. After ten years, all bankruptcy records must be deleted from your credit report.

However, the impact of bankruptcy on a credit score diminishes with time, thanks to a fall in the consumer’s debt-to-income (DTI) ratio, which measures how much you owe compared to the amount of credit you have available. As a result, you may see changes as soon as one to two years following your discharge.

How Long Does it Take to Rebuild Credit After Chapter 13 Bankruptcy?

Unlike a Chapter 7 bankruptcy, a Chapter 13 bankruptcy only lasts seven years on a consumer’s credit history. However, it might take anywhere from 12 to 18 months after your Chapter 13 bankruptcy is discharged to boost your credit score. After 18 months, many debtors can refinance their modified debt.

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What Are the Different Ways to Rebuild Your Credit After Bankruptcy?

It’s not easy to rebuild your credit after bankruptcy, but it’s possible. All it takes is a little dedication and hard effort. With that in mind, here’s a step-by-step approach to rebuilding credit after bankruptcy. If you follow the instructions below, your credit score will ultimately improve, and you’ll be able to regain control of your money.

Check Your Credit Report for Errors

After filing for bankruptcy, the first step in improving your credit score is to review your credit report for any irregularities. While having a bankruptcy on your credit report would undoubtedly negatively influence your score, the damage will be amplified if there are any other inaccuracies.

For example, if your debt is still shown as ongoing rather than erased following bankruptcy, it will even hurt your credit score.With that in mind, it’s a good idea to review your credit report thoroughly.. Each year, you are usually entitled to one free report from each credit agency.

When you have your credit reports on hand, go over them thoroughly and look for errors. You may always submit a credit dispute letter and ask the credit bureaus to erase any incorrect information from your report if you find any.

Apply for New Credit

Although it may seem paradoxical, obtaining new credit after bankruptcy is vital in improving your credit score. It allows you to demonstrate to lenders that you can make timely payments and are responsible for your provided credit.

The catch is that you should limit how frequently you seek for new credit. When a lender files an application, it makes a hard draw on your credit report, lowering your score further.

As a result, you should thoroughly examine your credit alternatives and apply for only one account at a time. For this, you have two feasible solutions:

Opt for a Secured Card. Secured cards are not the same as regular credit cards. You must first deposit money with a bank or credit union to get one of these cards. Your credit limit is then determined by the amount you put down. This strategy provides the additional lender certainty because they may keep your deposit as payment if you can’t make your payments on the card.

Secured cards are frequently more straightforward to get accepted for than standard credit cards because of the way credit limits work. Secured cards are commonly used as a stepping stone to traditional credit by people who have filed for bankruptcy. Your credit score should increase over time if you receive a secured card and utilize it carefully.

Get a Credit-Builder Loan. Credit-builder loans are relatively similar to secured credit cards in terms of how they function. Your deposit will serve as your loan balance in this scenario. You’ll be allowed to use the money, but you won’t be able to get it back until you’ve paid off the loan completely. As you make payments over time, the information will be recorded to the credit agencies, which will aid in the restoration of your credit score.

Smaller lenders and credit unions are typically the ones that would give this sort of loan. While practically every lender understands what a “credit-builder loan” is, these loans are also known as “starting over loans” or “fresh start loans.”

While it’s easy to slip into debt by using too many credit cards and buying too many products on credit, having one or two credit cards might help rebuild your credit.

We will get down with you at The Law Office of Clark Daniel Drey to promptly explore your alternatives for obtaining new credit lines following your bankruptcy. Our knowledgeable credit repair attorney will also show you how to pay them off each month so that your credit can return to normal in as little as three years.

Practice Good Credit Habits

Following your approval for a new account, the following step is to ensure that you maintain solid credit practices. With that in mind, use the advice below to begin rebuilding your credit after bankruptcy.

Make Your Payments on Time. Making on-time payments is the most efficient way to increase your credit score. Payment history is the most heavily weighted component of your credit score Additionally, aside from completing your payments on time, you should be sure to pay as much as possible over the minimum amount.

Keep Your Balances Low. Maintaining a low balance is also a good idea. Credit usage is how much credit you’re using compared to how much credit you have available. Credit usage accounts for a portion of your FICO score. 

How Can Our Skilled Credit Repair Attorney Help You?

One common misconception about bankruptcy in Colorado is that you will never be able to rebuild your credit. This could hardly be more untrue. Our experienced credit repair attorney at The Law Office of Clark Daniel Drey, will help you start rebuilding your credit as soon as you file. We’ve helped a lot of people improve their credit scores over the years, and we have the expertise and skills to help you as well.

For information on how to rebuild credit after bankruptcy in Colorado, contact our Broomfield credit repair attorney. We’ll work with the specific circumstances of your case to create a tailored answer to your concerns.

Get in Touch With Us Today

The Law Office of Clark Daniel Drey, based in Broomfield, Colorado, can assist you in selecting the best decision for resolving your financial troubles and then restoring your credit and attaining financial well-being.

Our credit repair attorney will meet with you one-on-one to review your circumstances and advise you on the best course of action, whether Chapter 13 or Chapter 7. We’re not going to stop there, either. We’ll help you get a fresh start with precise credit-repair methods and objectives.

Call us now for a free consultation, and let’s get started fixing your financial problems and rebuilding your credit after bankruptcy.

Denver Lawyer Clark Daniel Dray

Call Us today

303-900-8598

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Denver Lawyer Clark Daniel Dray

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