Myths of Bankruptcy

One of the most typical myth is that your credit rating will be so damaged that you will never secure a loan, or my name is damaged; this simply isn't true. 

Most people already have repayment problems, late payments, high balances, collection accounts and/or charge off accounts; this is what damages your credit rating. 

In most instances bankruptcy actually improves your credit score because these patterns of borrowing have been resolved.

You may not be able to bring your score up to the perfect 850 as long as your bankruptcy stays in your report, but with good credit management after filing, a score in the 700s is possible.

Bankruptcy can you give you a fresh start and with a few clever credit repair strategies, your score could be back in the 700s within two or three years after filing.

Here's some tips in how to raise your credit score after bankruptcy:

1. Damage Control

Make sure all the accounts you included in your bankruptcy are listed as such, and show $0 balances if you filed Chapter 7

2. Get New Credit Cards

After bankruptcy, if you can't get approved for an unsecured credit card, start out with a secured card. With a secured card, you will make a deposit with the credit-card issuer, which will in essence be your credit limit. Typically, after a year to 18 months of on-time payments, you could "graduate" to a regular, unsecured credit card.

3. Piggyback

If you have a trusted friend or relative, ask them to make you an authorized user on one of their credit cards. Your bankruptcy won't affect your friend's credit, but you'll automatically get the account history for that card in your report.

4. Bigger Loans

What about auto loans and mortgages? You can start shopping for auto loans as soon as a few months out of bankruptcy,

Check out more valuable information about Guam's Laws and working with Mark Williams, Guam's Best Lawyer, on Dededo Law Office's website, www.GuamLegal.com.