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Four Things You Can Do To Raise Your FICO Score

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FICO Score Affordable Bankruptcy Courses

 

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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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.