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Understanding and improving your credit score before or after bankruptcy

Understanding how your credit score works requires knowledge about how the credit system works and how lenders use your credit score. There are three companies, Experian, Equifax and Trans Union, and they collect your credit use and payment history and calculate your credit scores. Based on several elements of your credit patterns, your scores from each agency will range from an extreme low of 200 to an extreme high of 850. The average credit score among most people is 711. When your score is 740 and higher, you will likely receive the best interest rates on credit cards and consumer loans. If however, your score is 620 and lower, approval is less likely, and when approved for a credit card or consumer loan, your interest rate will likely be much higher. The interest on a credit card or loan can vary from five to 20 percent based solely on your credit score.

Your frequency of credit use and amount of credit allowed versus used is important to your score.

There are several activities and factors that affect your credit score. The amount of open credit card and loan accounts is a factor in your score. If you have several open credit accounts you are not using, or you have not opened a new credit account in many years, your credit score can suffer. The loan balance to loan amount is another factor in your credit rating. The more you pay down a loan, the better you can affect your score. A ratio of credit offered and credit used is important, especially with credit cards. If you have a credit limit of $1,000 you should keep your monthly spending around 30 percent ($300), which is a general rule, not using your credit limit and using up all your available credit are both harmful.

Get the free copy of your credit report and challenge the errors, or use a credit repair company.

Order a free copy of your credit report and decide how to take action or hire a credit repair company to do it for you. There is a free credit-reporting website (www.AnnualCreditReport.com) you can use to generate your full credit report. Most people have some inaccuracies or wrong information on their credit report. Reviewing all the information and challenging anything that looks like an error is a quick way to increase your credit score. Additionally, there are credit repair agencies you can hire to fix your credit for you, using all their tools and knowledge.

Obtaining secured credit cards is easy, use several and pay the fixed monthly bills.

Using credit cards and loans is a great way to improve your credit score when you follow a few basic rules. Paying your credit card on time every month is imperative to demonstrating credit responsibility. The more credit cards you have in current responsible, the better your score should be. It is a good practice to pay your fixed monthly bills with a few credit cards and pay them off every month. If you recently filed for bankruptcy or do not have a credit card, the secured credit card can help you start repairing your credit immediately. When you go to a local major bank, bring $300-600, deposited into a savings account connected to a normally functioning secured credit card. You receive and pay your bill on time every month and your credit improves. The bank may refund some or all of your deposit money once you demonstrate a positive payment history. If you never pay the bill, the bank will use your deposit to pay the bill.

Joseph Wrobel Ltd., can get your debts partially or fully wiped out and help you with credit rebuilding.

If you take advantage of the bankruptcy laws and discharge some or all of your debt, your credit card companies adjust the status of those debts and should reflect the new amount owed, if anything, but the credit reporting agencies do not always reflect the discharge. Joseph Wrobel, Ltd. has relationships with credit repair experts who can help challenge credit errors, assist in the clean up, and credit rate increase process. It is important to remember that good credit has less to do with what happened before the bankruptcy and everything to do with how you use and build credit afterwards.

Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start. To keep in touch and read about consumer finance news and stories you can “Like” the firm’s Facebook page and “Follow” Joseph Wrobel. Ltd. on Twitter. If you need immediate legal assistance, please call Joseph Wrobel, Ltd. by calling (312) 781-0996 to talk to an attorney today.