Facing dire financial hardships can leave you feeling as if you have no options. However, considering Chapter 7 bankruptcy could help you determine whether such action could allow you to work toward improving your situation. Though you may worry about how bankruptcy could affect your credit score, you may not want to let that worry act as a total deterrent.
Though bankruptcy may present itself as a blemish on your credit record, the filing does not have to permanently lower your score. Because many individuals who need bankruptcy already have less-than-stellar scores, bankruptcy can help interested parties get their affairs in order to raise their scores once they complete their proceedings.
Ways to raise credit scores
Though obtaining certain loans may prove more difficult immediately after bankruptcy, you do not have to feel as if you no longer have the ability to seek loans. You can take certain actions to show lenders your determination to improve your credit history, including:
● Secured loans: Because you may not have much access to unsecured loans soon after bankruptcy, you may have the option of utilizing secured loans. Your bank or credit union may offer this type of loan. With a secured loan, you borrow money while using funds in your bank account as collateral or by making payments to the bank before the institution releases the money to you. By using either type of secured loan, you make payments which can help improve your credit score.
● Secured credit cards: A secured credit card has conditions and benefits similar to a secured loan. In order to receive the card, you make a deposit beforehand, and your credit limit typically does not exceed the amount of your deposit. After utilizing a secured card, your on-time payments likely help you qualify for an unsecured credit card later, if desired. However, you may wish to research your secured card choice in order to determine your best option.
● Co-signed loan: You may have the option of obtaining a loan if you have a co-signer. When someone else co-signs your loan, he or she places his or her credit on the line and could face damages if you do not make your loan payments. Therefore, the co-signer must also have a good credit score.
Filing for bankruptcy
Because options exist for improving your credit score after Chapter 7 bankruptcy, you may wish to find out more information about your choices for proceeding with this debt relief option. Rather than facing the stress of considerable financial struggles, you may have the ability to get your state of affairs back on track.
In order to gain an advocate during your process, you may wish to enlist the assistance of an experienced South Carolina attorney.