If you’ve recently filed bankruptcy, you may be worried about how this affects your credit profile, now and in the future.

Certainly, no one wants to proceed with bankruptcy if they can avoid it. But, many people are left with no choice. And, it can offer a way out to those who are overwhelmed by extreme debt.

You should know that if you’ve felt forced to file for Chapter 7 or Chapter 13, you aren’t alone. Although the number of bankruptcies filed each year has dropped since peaking about seven years ago, there are still plenty of people turning to the courts for a solution to financial crises.

Last year over 767,000 people filed for bankruptcy in the United States. That’s down from over the 1.5 million bankruptcies filed by individuals in the U.S. 2010.

If you are interested in rebuilding credit after bankruptcy, this post is for you.

Read on to learn more!

Rebuilding Credit After Bankruptcy

Once you have filed for bankruptcy, you may initially experience feelings of relief. But, eventually, you will probably develop some concerns about what it will take to rebuild your credit.

Let’s face it. In today’s society, having good credit offers a substantial advantage. Often, those with a negative credit score will face major obstacles when trying to obtain basic necessities, such as housing and personal transportation.

Filing for bankruptcy can result in automatic disqualification of loans and other opportunities until you are able to show that your financial situation has improved. One way to do this is to get serious about boosting your credit score.

Research shows that individuals with even a fair credit score may face expensive consequences. According to an article published by CNBC, a mediocre credit score can cost you up to $45,000 more than someone with a very good score. So, even if you haven’t had to file for bankruptcy, improving a poor to fair credit score can offer significant benefits.

If you’re ready to start rebuilding your credit, here are 5 steps that you should take.

1. Find Out Where You Stand

First, you should find out what your credit report reflects and obtain a current, accurate credit score.

Sometimes, the reality of your credit standing may not be as bad as you think, even if you have had to file for bankruptcy.

Plus, this will give you the opportunity to review any negative reports impacting your score.

2. Correct Any False or Inaccurate Information

Filing for bankruptcy should result in the removal of most items that negatively affect your score. However, sometimes creditors are slow to do their part in getting these items off your report.

If you notice that there are items that show a discrepancy, you should contact the creditor immediately to have these items removed or updated to reflect where you currently stand.

3. Contact Creditors That Show an Outstanding Balance & Make Payment Arrangements

If there are any accounts that you owe a balance, whether they are newly established or from years past, now is the time to address them.

Contact these creditors directly to make payment arrangements and find out what is required to repair the financial relationship.

Once you have established a brief history of on-time payments, you can ask that they take action so that these changes are reflected on your credit report. Any accounts that show you are in good standing have the potential to help boost your score.

4. Obtain Products That Allow You to Establish Positive Credit

It may take some work once you have sought bankruptcy, but there are certain creditors that work specifically with people who have negative histories.

You should know that you may have to pay an annual fee or higher percentage rate to initally obtain any forms of credit, but in the end, it will be worth the cost.

Try to find a credit card that offers the best possible terms, then commit to minimal usage and timely payments each month.

Maintaining a low debt ratio is crucial during the period following bankruptcy. It is also essential that you prove yourself capable of making payments before their due date.

It may feel counterproductive, but obtaining a line of credit, even if the terms are less-than-desirable, can be a big help to a struggling score. But, keep in mind, you should only obtain credit if you are sure that you will be able to stick to the terms of agreement.

5. Seek Professional Assistance

Luckily, there are places that you can turn to for free assistance in rebuilding a negative credit score.

Seeking professional advice is one of the best ways to get the help you need to improve your credit. Expert credit repair can be a most-valuable tool for those who have encountered major financial woes.

A credit repair professional can help you find the best potential solution to rebuild your credit in the least amount of time possible.

Get Free Expert Advice to Start Rebuilding Your Credit Today!

If you need assistance rebuilding credit after bankruptcy and don’t know where to start, we can help. We offer advice to help you improve your credit. Plus, you can find out the steps you need to take to get the positive results you crave.

Best of all, these resources are freely available. So, you don’t have to wait until you can afford to pay for credit repair services to start rebuilding your credit right away.

Want pro tips on the fastest way to repair your credit score?

Check out this post to find out the essential steps you need to take if you want to rebuild your credit quickly!

Marriage is more than a bonding of two hearts. It’s also a union of finances and financial responsibility. 

However, money is a common source of marital stress and a leading cause of divorce. In a recent survey, 79 percent of divorcees said money played a role in their divorce.

When a marriage fails or ends, your heart bears the emotional toll, but that’s not all. Your credit score could also take a hit.

While we can’t do much about your heart, we can do something about your finances and credit score.

In this article, we answer the question “how does divorce affect credit” and tell you how to protect your credit.

Keep reading!

When Divorce Marks the Beginning of Financial Trouble

When calculating your credit score, credit bureaus don’t factor in your marital status. As such, divorce doesn’t directly affect your credit.

It’s the inevitable post-divorce financial troubles that’ll give your credit score a beating.

Let’s explore some of these potential situations.

Late/Missed Bills

It’s common for couples to shares financial bills in a marriage. Maybe you pay the rent in turns or make a 50/50 contribution every month.

Regardless of your specific situation, a divorce can be the end of your shared financial responsibility. One party could, for revenge or whatever reason, fail to honor their end of the deal.

If you don’t have the financial muscle to settle the bills alone and on time, your credit standing will be in jeopardy.

Typically, rent and other monthly utility payments don’t appear on your credit. But if they remain unpaid for a couple of months, the service providers could send your accounts to debt collectors.

Collections accounts bearing your name indicate a poor payment history. And, with payment history accounting for up to 35 percent of your credit score, expect a big drop.

Joint Marital Debt

In marriage, especially when it comes to money matters, unity is strength.

When you and your partner come together financially, you can get approved for a joint credit card with attractive interest rates. Or you can secure a joint mortgage and buy a bigger home.

In the event of a divorce, though, the joint debt could come to haunt your credit.

Even though a divorce nullifies your marriage, it doesn’t terminate any joint contracts or agreements you had with a financial institution. Sure, a family court can rule that one party is responsible for the joint debt, but that doesn’t mean you’re out of the woods. If your partner slacks on payments or lets the debt go into default, the credit score of everyone listed on the joint account will tank.

Divorce and Bankruptcy

Divorce is a common reason for individual bankruptcy filings, and it’s easy to see why.

Facing unexpected financial pressure arising from credit card or marital debt, a divorcing couple can decide to individually or jointly seek bankruptcy protection. Depending on the bankruptcy you go for, your debt could be wiped out or you could get more time to settle it.

A big drawback of filing for bankruptcy is it can stay on your credit report for up to 10 years. It will also seriously hurt your credit score.

What You Can Do to Protect Your Credit

After a divorce, life moves on. You still have to stay on top of your financial obligations. 

It’s in your best interest to protect your credit standing before and after a divorce. Here is how to do it.

Adjust Your Lifestyle Accordingly

With a combined income, a couple can comfortably afford the finer things in life. A bigger house, frequent vacations, private education for the kids…you name it.

But when a divorce happens, ex-couples face the prospect of living with a reduced income.

Don’t make the mistake of continuing to live a life your individual income cannot sustain.

If your ex-partner moved out of your home, for instance, you might be tempted to keep it, but will your finances allow? Will you afford to settle the mortgage in case your ex stops paying up?

If not, it’s best to downsize. This may mean moving into an apartment or even moving back with your parents as you fix your finances.

Divorce is often a difficult and costly business. Trying to maintain a lifestyle you cannot afford will not only make the transition more traumatic but also put your credit rating at risk. Anything from late utility bill payments to missed mortgage payments can hurt your score.

Don’t Slack On Payments

On your part, you might not have a problem settling individual bills.

The problem is with the joint debt. Your ex could simply stop paying up what they owe.

To protect your credit, the onus is on you to follow up and make sure the ex stays on top of the payments. If they don’t, both your scores will be affected.

But how do you find out if your ex is paying up?

Obtain the statements of your jointly-held accounts and find out whether they are up to date. If not, remind your ex that they’re late on the payments. In case your ex isn’t cooperating or unable to pay at the moment, you can pay, and then ask your lawyer to seek orders requiring the ex to reimburse you.

Another option is to keep tabs on your credit report.

If your ex has defaulted on joint debt, it’ll show up on our report. Although by this point your score might have already taken a hit, taking the appropriate action will help prevent further deterioration.

Cut Financial Ties with Your (Soon to be) Ex

Often, it’s what you do just before the divorce that will save your credit score the most.

You see, marriages rarely end out of the blue. There will be signs. And when you see these signs, it’s time to start severing financial ties with your spouse.

Keep note, some financial ties are harder to severe than others. For example, it’s easier to remove your name as a cosigner on a rental agreement than it’s to get out of a joint mortgage.

Either way, explore your options and severe all the financial ties you possibly can. After the divorce, there will be fewer financial obligations on your plate.

How Does Divorce Affect Credit? Now You Know!

In today’s economy, having a good credit score can mean the difference between financial freedom and financial hardship.

This is why you need answers the question “how does divorce affect credit” and know what you can do to protect yours. Lucky for you, we have killed the two birds. Now you know the various ways divorce can harm your credit, as well as how to minimize the damage.

If your score has already taken a beating, worry not. Read our credit repair tips to start rebuilding it.                                 

Credit is that ever-dreaded, ever-sought-after thing that can greatly affect your ability to make important financial decisions. We tip-toe around things that could have a negative effect on our credit, but sometimes we’re forced to make decisions that harm our credit score.

Some situations may warrant excessive credit card use. For example,  Maybe our jobs fall through and we’re forced to miss a rent payment or something similar. It happens.

Those things adversely affect our credit scores, and it can seem like the end of the world. But how long do credit problem lasts? Do you have to live your entire life with bad credit if you forget to pay the balance on a credit card or two? Keep reading to find out.

How Long Do Credit Problems Last?

If you’ve had a few slip-ups, you aren’t doomed to an eternity of bad credit. Your credit will improve over time if you let it, but the amount of time it takes depends on the kind of penalties you had.

We’ll cover a few of the different penalties you may have experienced and how long it takes for them to be taken off of your credit score.

When You Miss a Payment

Things like car, rent, and mortgage payments are all going to leave a dent in your credit score if you miss them.

From the date of the missed payment, seven years will go by until that blemish is removed from your score. Even if you pay the balance right away, your credit score will still reflect that you missed a payment.

That being said, you should still pay the balance as soon as you can to prevent further penalties.

Collections Agencies

You may miss enough payments to have your account “charged off” and sent to a collection agency. The reflection on your credit score will, again, stay for seven years.

Usually, your account gets sold to a collections agency roughly three months after your first missed payment. They could come from overdue credit card payments, medical payments, even utility payments.

You should do your best to pay those fees as soon as possible though. Because, in addition to charges piling up, you’ll be liable to receive additional charges and even face legal action if you don’t get square with the collections agency. The seven years, though, starts on the date of your first missed payment.

Paying off the debt sooner than later can have a benefit to your credit score, too. While the issue will still appear on your credit score, it may be less significant if you can show that you paid it off quickly. Additionally, some late payments will have harsher consequences than others.

Late medical bills, for example, will be a little more forgiving than late credit card payments.

Bankruptcy

Bankruptcies are likely to stay on your report for seven to ten years. The length of time depends on the type of bankruptcy that you went through.

The longest lasting hit to your credit will come from a Chapter 7 bankruptcy, staying for ten years, while a Chapter 13 will only last for seven years. The harm of your bankruptcy will diminish slightly two years after it happens.

The trick is to be careful with your credit and give it time to improve as you make wise financial decisions.

Hard Inquiries

You get hard inquiries from businesses that are considering the option of giving you a line of credit. The hit isn’t too bad, but it does last on your score for a year.

The inquiry will show on your credit report for a couple of years, but your score will only be affected for the first year. These inquiries account for only 10 percent of your score, and an inquiry will only drop your score by a few points.

What Can You Do to Boost Credit?

In the face of damages to your credit, it can seem like a lost cause to even try to improve it. Don’t get too down on yourself, you will have great credit after your damages are crossed off of your report.

Seven years down the line, you’ll thank yourself for having done the following things:

1. Making Timely Payments

Whatever the issue was that caused you to miss payments before, do whatever you can to solve it. If it was a fluke from the universe and a squirrel stole your wallet and emptied your credit accounts, so be it. But if the issue had to do with money management or something personal, do your best to work on solving the issue.

Additionally, keep all of your financial information organized. Late payments are often just a result of sloppy bookkeeping and forgetfulness– we’ve all been there. Keep a folder with all of your bills and records.

If physical documents aren’t your thing, find one of the many sites online that will help you organize your finances.

2. Get a Credit Card, Don’t Use it Much

You can build credit by successfully making payments on time. Open a credit card and use it once a month for gas. Fill up your tank, then pay off the balance right away.

Doing this will slowly build your credit and show that you’re a reliable person. If you have to use your credit card more often than that, do your best to keep the balances low.

3. Talk to a Financial Advisor

Financial advisors can help you make realistic plans to knock out your debts and build credit. They can also inform you as to which debts to cover first, and which ones you can put off.

Need Help Improving Your Credit?

It’s not easy to solve credit problems all by yourself. Sometimes you need to use outside resources to inform how you’ll move forward.

If you’re in a situation where you need assistance with your credit report, we’ve got the information you need. Please comment below with any questions you might have or get in touch with us today.

Given that nearly 80% of Americans are saddled by debt, an increasing amount of that is medical debt.

As many of these people in debt have put their money on credit cards or have taken out loans, these debts slip into collections often. If you still owe the hospital or treatment center, your medical debt is subject to medical collections, which can drag your credit score way down.

Here is what happens and what you can do about it.

What Happens to Your Credit Score

Your credit score is subject to being dragged way down when your medical bills get out of control and you fall behind your payments. As collection agencies report your delinquency to other financial institutions and credit reporting companies, you’ll see a negative impact on your financial future.

Once you’ve damaged your credit, other aspects of your life end up being impacted negatively.

Your ability to take out a loan for a car or a home ends up at risk. If you need car insurance, you’ll find that your insurance rate goes up as your credit score sinks. As medical collection agencies continue knocking at your door, your ability to get credit in other forms disappears.

If you’re looking for a way to avoid dealing with credit damage, here are four to steer clear of problems due to medical bills.

1. Pay Those Bills

First things first, you need to pay your medical bills on time. If you’re on a payment plan, pull out all the stops to ensure you pay your bills when they’re due. If you’re struggling to pay your bills, call up your financing company and renegotiate ASAP

While you might think you’re paying for everything as you should be, there’s a chance you’re not aware of what you owe. The confusing tangle of wires that makes up insurance, deductibles, co-pays, and co-insurance leaves a lot of people thinking they’re paying when they’re falling behind.

Don’t play dumb. Call your insurance provider to ensure that your medical bills get paid as they should be. Assuming that everything will work out is going to be your downfall.

After every appointment you make, add something to your calendar one month later that says “check balance”. This way, you’ll remind yourself to reach out to your medical institution and insurance company. Watch your mailbox too in order to keep from missing any important piece of mail.

2. Get an Itemized Bill

Most institutions won’t give you an itemized bill when you go to pay them. You’re more likely to get a general bill just telling you what you owe. If this is the case or if the bill looks bigger than it should be, an itemized bill gives you the chance to review your charges.

Not every insurance company communicates well with every financial institution or vice versa. Many people are billed without taking into account their insurance, meaning that their bill doesn’t represent what it should or how much they should pay. Some people wait for insurance companies to kick in, which may not happen, meaning that late fees and charges rack up while you wait.

Your itemized bill gives you the opportunity to negotiate payment with your health care provider. The charges that you get could be inflated, incorrect, or have been improperly added. You won’t know unless you get an itemized bill.

Contact the provider if the bill doesn’t look right to you. Be proactive rather than waiting for someone to bother you about your coming bill.

3. Negotiate with Collectors

If you’re at the phase where your bills are in collection, all is not lost. There’s still an opportunity for you to grab the reins of your bills and steer them a bit. When you’re contacted about a medical bill, negotiate with them not to report if you agree to pay it as soon as possible.

Some collectors are more amicable than others and stop the reporting mechanism as soon as a bill gets paid. However, double check that this bill is legit because false collection companies have found ways to scam consumers this way.

After you’ve paid the balance, your credit score may end up staying the same if you don’t ask the agency to remove the item. The term for this is a “pay for delete” and the collection agency must agree to these terms before it begins. Some agencies give you this statement in writing, but if they don’t, ask for it directly before you proceed.

Collection agencies aren’t required to take this step, so if they do, be appreciative and meet them halfway. If they need paperwork or a signature from you, hustle to get it done on time so that this process can play out ASAP.

4. Set up a Payment Plan

If you’re underwater with your medical debt and know that it’s too much to pay on time, set up a payment plan with the agency. If you’re still under the umbrella of the medical provider, work with them to pay on a monthly or weekly basis depending on your debt. If you catch them before your account goes into collections, you’ll save yourself a headache.

To improve your credit score, ask your medical provider to get the account back. Tell them you’re willing to pay it and put together a payment plan. This ensures that you’ll get that mark removed from your credit score and be back to dealing with the medical provider directly.

If they agree to do this, don’t make any mistakes. You can’t afford to make one at this point.

Medical Collections Are a Messy Headache

If your bills end up in medical collections, you’re headed for a nightmare of phone calls, nasty letters, and even garnished wages. Rather than wrestling with these collection agencies, get on top of things so that your financial future doesn’t end up impacted over your medical bills.

For a few credit cards to help rebuild your credit, check out our latest guide.