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Personal bankruptcy and rebuilding credit

Families that are struggling with financial challenges and crippling credit card debt often want to do everything possible to avoid filing for personal bankruptcy. For some people it is simply a matter of personal pride, while for others it is based on fears about the effects of bankruptcy. Tennessee families struggling with credit card bills and credit card debt might enjoy the following article on rebuilding your credit score after filing for bankruptcy.

Everyone has heard the doom and gloom stories about filing for bankruptcy. While filing will certainly have an impact on a person's financial life, in reality, the impact will be mostly positive. From ending creditor harassment to the peace associated with fresh financial start, the benefits of filing for bankruptcy far outweigh the bad. And, as far as the bad goes, a debtor can actually begin rebuilding their credit score and financial life almost immediately.

The first step in rebuilding a credit score is to begin making whatever existing payments that were not extinguished in the bankruptcy. This will immediately begin to have a positive impact on a consumer's credit. Further, if all of the debt was extinguished in the bankruptcy it is important to begin to establish some new debt in order to start rebuilding a history. One way to do so safely is to use secured credit cards. Most banks provide secured credit cards.

A persons FICO score is determined by the last two years of their credit activity. While a person's older accounts are taken into consideration, the newer information on a person's history is given much more weight. In order to rebuild more rapidly it is a good idea to open multiple secured credit cards. Once this is done the borrower can make small purchases each month being sure to make the payments and keeping the balance below 30 percent.

Source: MSN, "3 steps to rebuild credit fast," Barry Paperno, Feb. 25, 2013

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Mark T. Young & Associates
2895 Northpoint Blvd.
Hixson, TN 37343

Toll Free: 888-376-0282
Phone: 423-933-1606
Fax: 423-877-0363
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