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Your Credit Report and the Effects of Bankruptcy |
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Written by Casey Deanwater
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Wednesday, 09 December 2009 09:51 |
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How long will a Bankruptcy ruin a person's credit?
by CaseyDeanwater
How long will a Bankruptcy ruin a person's credit?
If bankruptcy is inevitable, you may file either a Chapter 7 bankruptcy or a Chapter- bankruptcy. Chapter 7, also called a "liquidation bankruptcy," provides for the discharge of your debt. Chapter-, also called a "reorganization bankruptcy," allows you to negotiate a repayment plan.
How Does Bankruptcy Affect Your Credit History?
Creditors will discontinue their efforts to collect debts from you when you file bankruptcy; however, be aware that this will negatively impact your credit report. As such, obtaining a loan to purchase a home or other major purchase, such as a car, may become close to impossible.
When you file bankruptcy, your credit score will plunge by hundreds of points. This same bankruptcy will remain on your credit report for 10 years, unless you try to remove it. One option to consider is rebuilding your credit score. This, however, is difficult at best when no one is interested in offering credit to you.
A credit company will most likely deem a person with a bankruptcy on their credit report as a possible financial liability. In light of this, you might want to consider repairing your credit score.
Taking immediate action to rebuild your credit can go a long way in boosting your credit score and will alleviate the worry of waiting 10 years for your bankruptcy to clear on your credit report. Choosing to rebuild your credit is a smart decision which can lead to approval of home loans and loans for other major purchases, such as home remodels or a new car, sooner.
Rebuild Your Credit Legally
There is a legal route to challenging information on your credit report. If you believe any entry on your credit report is inaccurate, the Fair Credit Reporting Act (FCRA) allows you to contest this information.
If you send a dispute letter to a creditor or credit bureau, the disputed entry must be investigated and verified within a specific timeframe. Subsequently, the negative entry must be deleted in its entirety if it cannot be verified.
Expert advice can be invaluable if you decide to pursue rebuilding your credit. Lexington Law's legal professionals can guide and assist you in your attempt to remove negative entries. Consider contacting Lexington Law to get the assistance you need to clean up negative entries on your credit report.
About the Author:
We raised our credit scores from the upper 500 range to 745 and 763 in under six months and got approved for our dream home. See proof of our credit repair success at www.creditforcouples.com and get the real truth about lexingtonlaw.com . |
