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BOOSTING CREDIT SCORES AFTER BANKRUPTCY
Is achieving a 700 PLUS FICO credit score possible one year after a bankruptcy discharge?
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According to statistics, it is not impossible to acquire a FICO credit score of more than 700 a year after declaring bankruptcy, and this is how one can achieve it.
Primary Areas for Regaining a Credit Score
Discharge Timeframe: Time affords more opportunities for improvement. On average, one-year post-discharge is an appropriate period to start rebuilding.
New Credit Accounts: Opening new credit accounts should be done only with precaution, for example:
Secured credit cards: Progress in rebuilding a credit score is only possible if necessary payments are made.
Installment Loans: Depending on one’s circumstances, a small personal loan can help balance one’s credit mix.
Payment History: It is very important to make payments on time, as this affects the score the most.
Credit Utilization: Aim to maintain a low credit utilization ratio (30 percent or less), which implies using a maximum of 30% of the total limits extended to you.
Credit Mix: A varying blend of credit sources, such as revolving credit and installment loans, can benefit one’s score.
No new derogatories: Refrain from making any late payments or charge-offs to make derogatory marks against your name.
How to Restore Your Credit Rating
Citizens of the US are given three credit scores, which predict creditworthiness. How do credit scores work? It’s a longitudinal study of past behavior around paying mortgages, car loans, and just plainly paying your bills.
If a person wishes to rebuild their credit score, it is advised that they follow the following instructions:
Monitor One’s Credit Report: Always look for anomalies, mistakes, and similar information, as incorrect information about you will adversely affect your score.
Setup Payment Alerts: So you don’t miss out on any payment – the best bet is to automate everything.
Avoid Opening Too Many Credit Accounts: You should not get too eager to apply for credit accounts since your score is negatively impacted every time you apply for an account at a new institution.
It Took Time: Don’t get discouraged when things don’t go your way. It’s mostly due to bad habits, and you will get the hang of it as time passes.
Achieving a 700 or higher credit score one year after declaring bankruptcy would be a stretch in several instances, given the details available in the case with other factors. However, it is achievable if one stays disciplined and focused. The bottom line is to constantly monitor your movement in the credit score chart and remain disciplined—seek advice where necessary from a financial advisor or even from counselors who deal in credit repair.