Rebuild Credit
A common misconception by many people is that bankruptcy is more damaging to your credit than not filing bankruptcy. While it is true that a bankruptcy does not look good on your credit report, neither does foreclosure, repeated late payments, and unpaid debts, all of which can have a very damaging effect on your credit. With the guidance of a San Diego bankruptcy lawyer, within a year or two after filing bankruptcy your credit score can actually improve, sometimes substantially. Of course, each case is different and much of it depends on where your credit score was before you filed bankruptcy in San Diego. The fact is: many of our clients at Bankruptcy Legal Center find that after they file bankruptcy and receive a discharge of debts, they see a dramatic increase in credit score after bankruptcy.
How To Rebuild Credit and FICO Score After Bankruptcy San Diego
To effectively rebuild your credit (and see your credit score rise), your San Diego bankruptcy lawyer will show you simple steps you can take, such as making all of your monthly payments on time for all new loans, new credit cards and other new debts and obligations that you acquire after bankruptcy. In addition, you should timely make all of your payments on an any pre-bankruptcy loans or obligations that you reaffirm after you file bankruptcy. By timely making all of your payments after your bankruptcy filing, you will steadily rebuild your credit. If after bankruptcy you begin timely making all of your monthly payments, you will begin to rebuild credit after bankruptcy San Diego. By establishing good credit after bankruptcy, your credit score will gradually increase and can improve dramatically.
FICO Score
It is clearly established that you can raise your FICO score after bankruptcy, however, there is no set formula for determining how fast you will increase your FICO credit score. Some bankruptcy filers who made all of their payments on time prior to filing bankruptcy to eliminate credit card debt enjoy a 700 FICO in as little as two years after filing a Chapter 7 bankruptcy, even though the bankruptcy can remain on their credit report for up to 10 years. Some bankruptcy filers who have a 500 credit score prior to filing bankruptcy find that they have a 600 credit score two years after a Chapter 7 bankruptcy filing.
New Home Loan After Bankruptcy
Some San Diego bankruptcy filers are able to obtain a new home loan as soon as 2-3 years after receiving a discharge or as soon as 1 year after beginning to make payments under a Chapter 13 Plan. By contrast, after a foreclosure, many borrowers are not able to obtain a home loan for at least 3 years. Multiple factors may determine your creditworthiness for lending purposes and different lenders may give different weight to different factors.
Talk to a Bankruptcy Lawyer
Every individual case will be different. What is certain is that with proper legal counseling by an experienced San Diego bankruptcy lawyer there is hope: you can begin to rebuild your credit. If you practice perfect credit habits, and have sufficient monthly income, you can qualify for a new home loan in as little as 2-3 years after filing bankruptcy in San Diego.
