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Four Things You Can Do To Raise Your FICO Score

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Have you just exited bankruptcy and want to prepare for some big life changes such as buying a house or new car? You’ll want to first improve your FICO score. FICO is the score used by lenders to help them determine if you’re a good credit risk. While standards vary by lender, a FICO score above 640 should get you a pretty decent loan. But a little improvement never hurt anything. Below are a few things you should do to improve your FICO score:

1. Use your credit cards. It’s understandable that you want to be frugal after bankruptcy, but having an inactive credit card on your credit report can actually bring down your FICO score. To avoid problems, try to use your card at least once every few months, but pay it off immediately.

2. Get more credit. If you have a short credit history with very little credit line variety, make sure you get at least one type of various credit lines. For example, having both a credit card and installment loan is a good way to improve your FICO score and show lenders that you can manage different types of debt.

3. Don’t keep your credit cards at the limit. If you’re keeping a balance on your credit card try to keep it at no more than 50% of your available credit. Lenders will shy away from anyone who is maxing out their credit line. That screams credit risk.

4. Don’t become a credit hound. While exiting bankruptcy is an exciting time to rebuild your finances, chasing after too many credit lines can drag down your FICO score. Choose a small number of credit applications to fill out so that you don’t appear desperate for credit.

If you want to make the most of your post-bankruptcy life, create a strategy to improve your FICO score.

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Success After Bankruptcy – Is It Possible?

new-horizonFiling for bankruptcy can be a scary process, especially if you are not knowledgeable on the subject. However, it is important to remember it is also a financial lifesaver, in that it provides the option of debt relief for those struggling financially – depending of course, on whether you file Chapter 7 or Chapter 13 Bankruptcy. Chapter 7 is known as ‘liquidation bankruptcy’ in that it wipes your slate clean of all your debts, and Chapter 13 is termed ‘reorganization bankruptcy’ as it offers the filer a fresh start in the form of a debt repayment plan.

If you are fearful of filing due to ‘bankruptcy shame’, then read on. In this day and age – contrary to popular belief – appearing on the big screen and living in the bubble of Hollywood does not protect you from bankruptcy. We regularly hear of cases of the rich and famous who have filed for bankruptcy protection, who then afterwards still go on to become hugely successful. Such examples are Walt Disney, Milton Hershey, Abraham Lincoln, Henry Ford, Mike Tyson and Burt Reynolds, to name a few. Mark Twain is another example, who was insistent on repaying the debts he had accrued, despite having had them discharged in the bankruptcy process. He was true to his word and did so, and then went on to write several of his now classic books.

Large organizations can also seek bankruptcy as a necessary business decision – just last month, the sandwich chain Quiznos announced they were planning on filing, claiming staggering debts of $570 million. Lehman Brothers also hit the headlines in 2008 with their debts of $600 billion, forcing them to file for Chapter 11 Bankruptcy. And how could we forget the infamous rise, fall, rise rollercoaster of the Twinkie?

This just goes to show that no-one is exempt from bankruptcy. And, post-filing, your financial struggles do not determine your future. They are merely a ‘blip’ on your financial radar, and can be the kick-start you need towards a brighter future free of financial worry and stress.

Considering Filing? Use Affordable Bankruptcy Courses!

If you are in the situation where you are considering filing for bankruptcy, the first step is to find a reputable, U.S Trustee-approved provider of a Credit Counseling Briefing – to be completed prior to filing – and Debtor Education, to be taken before debts can be discharged. The two courses required by law as part of the bankruptcy filing process.

Affordable Bankruptcy Courses offers both of these at very affordable prices, and there is no phone call requires for certification! These are available 24/7, in both English and Spanish.

Your Financial Freedom is Right Around The Corner!
Sign up for your Credit Counseling Briefing now for only $15 per household!

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4 Types of Bankruptcy To Be Aware Of

Are you suffering from excessive debt burden? Do you find it troublesome to make the debt payments? If this is your situation, then choosing bankruptcy could be a suitable option for you. With the help of bankruptcy, you can get relief from the enormous debt problems either partially or completely. However, you need to know that when you file for bankruptcy, it will remain on your credit report for 7 to 10 years. As such, bankruptcy hurts your credit score to a great extent. There are different types of bankruptcy methods including Chapter 7, Chapter 11, Chapter 12, and Chapter 13. Read on to learn more about them:

  1. Chapter 7 – A Chapter 7 bankruptcy is the most common type of bankruptcy that is filed by the consumers. All your assets get liquidated and your outstanding debts are wiped out completely. Chapter 7 bankruptcy pardons the debtors who have a financial crisis such as credit card bill and medical debt. By filing Chapter 7 bankruptcy, you will be able to eradicate credit card dues or medical bills. This kind of bankruptcy is available for the individuals, couples, business partners and corporations. When you file for Chapter 7 bankruptcy, it stays on your credit report for 10 years.
  2. Chapter 11 – With the help of Chapter 11 bankruptcy, business owners get a suitable opportunity to reorganize their debts. The debtor’s claims of creditors are either paid partially or completely by the debtor. The reason for reorganizing the debt is to restructure them so that the debtor can function better with the debts. However, you cannot file for Chapter 11 bankruptcy if a petition was discharged in the last 180 days. Besides this, a bankruptcy petition cannot be filed unless the debtor has acquired credit counseling from an approved credit counseling agency in the previous 180 days.
  3. Chapter 12 – Chapter 12 bankruptcy was designed particularly for the reorganization of family farms. More than 50% of your income must be derived from farming or fishing in order to qualify for this kind of bankruptcy. Chapter 12 is only available to the individuals whose debts meet specific debt restrictions. A family farmer may either be an individual, a corporation or a partner.
  4. Chapter 13 – A Chapter 13 bankruptcy is a debt repayment plan that is available to individuals and married couples who have debts that fall within a definite statutory amount. Chapter 13 bankruptcy enables the debtors to pay off either some or all of their debts from their income over a period of 3 to 5 years. When you file for Chapter 13 bankruptcy, it will remain on your credit report for 7 years.

 

Thus, these are the different kinds of bankruptcy that you need to be aware of when you decide to file. It is always best to consult with an experienced bankruptcy attorney before proceeding with any type of bankruptcy.

This is a guest post by Andrew who writes for financial communities.