Recovering from a financial downfall and restoring a good credit rating can be challenging but certainly not impossible to do.
Debt has been a persistent problem for many people. It has become this vicious part of a seemingly normal lifecycle that it is almost always too late to realize its negative impacts once we’re all caught amid late payments, phone calls from bill collectors, getting by with little to no cash on hand, and so on. Eventually, all of these lead to a negative effect on our credit scores. It’s a crash-and-burn nightmare scenario that we all want to avoid happening in reality. But if it does, filing for bankruptcy is the best recourse to get out of that financial predicament, regain control of your life, and recover your peace of mind.
The most prudent way to tackle bankruptcy is to go to the experts – a bankruptcy law firm. With more than 30 years of proven track record of bankruptcy legal experience in providing their clients debt relief in San Diego, California, the Law Offices of Ronald E. Stadtmueller is a law firm that specializes in Chapter 7 bankruptcy, Chapter 13 bankruptcy, Bankruptcy Law, Debt Reorganization, Debt Discharge, and other general bankruptcy consultation and legal proceedings.
With offices conveniently located in Mission Valley, Rancho Bernardo, San Marcos, and La Jolla, Ronald Stadtmueller and his team of bankruptcy lawyers effectively make the bankruptcy process as informative, painless, and as comfortable as possible for their clients to give them that much-needed fast resolution for their debts and, ultimately, financial freedom.
Debt & Credit Scores
Debt has been the fuel of most stress and anxiety, if not the cause of it. Not only does it negatively affect our mental and emotional well-being, but it also has this resounding effect that can be felt by those around us, especially our families. Incurring debt is unavoidable. There are instances in life that make us accumulate more debts than necessary, such as job loss, health issues (illness or injury), a new family member, separation, divorce, death, etc.
It doesn’t take much to figure out that debt also directly impacts our credit scores.
A credit score is a consumer’s creditworthiness, their scoring of credibility to potential lenders. The higher the score (670 and above), the more likely a consumer will get approved for credits or loans. Credit history is what sums up a credit score, which includes accounts opened, number and levels of debts, payment history, etc.
The amount of debt plays the biggest factor in a credit score, which is at 30% of the credit score. The higher your debt is, with credit utilization totaling more than 30%, loans and credit card balances included, the more it will hurt your credit score. A low credit score could affect chances of getting approved for future loans, rentals, subscriptions, etc.
Improving your Credit Scores
Filing for bankruptcy can give you that much sought-after fresh financial restart to help you recover your financial control, especially when improving your credit scores. Bankruptcy helps eliminate unsecured debts, including, but not limited to, credit card debts, bank loans, installment loans, payday loans, tax debts, and so on. And that coveted bankruptcy discharge document can do wonders for you by cleaning out your debts fast!
A credit score is established from credit history. Filing for bankruptcy will allow you to build your credit history again. Here are some other proactive steps you can also take to start building back up your credit scores.
Stay on top of your bills
Staying on top or consistently making timely bill payments in full amount is an excellent way to start building back up and creating a good credit history. This includes all kinds of bills, loans, including credit card debts. Every time you make on-time full payments creates a good impression on you as a borrower and is a good mark-up on your credit reports.
Go for a Secured Credit Card
One of the best ways to build good credit is having a credit card and making consistent monthly and complete payments on it. Secured credit cards are a strategic way of rebuilding credit history and are easier to get since they typically require a cash security deposit. Timely full payments can help rebuild creditworthiness, and your credit card issuer could eventually issue you a regular, unsecured credit card or increase your credit limit.
Utilize credit-builder loan
Credit-builder loans are designed for those who want to bounce back and regain their financial balance. A credit-builder is an excellent tool for people trying to build or rebuild their credit scores as it allows a borrower to prove their reliability in making payments. In a reverse-like way, a credit-builder lender holds the amount of money to be borrowed in a certificate of deposit, or a secured savings account under the borrower’s name. The borrower makes monthly payments with interest, and when the loan is fully paid, that’s the time the borrower will receive the full amount on the account.
Talk to the Professionals
It is very possible to rally and come back from that financial sinkhole you find yourself in, and all the more so it is possible to recover and rebuild your credit score. It can be challenging to go through bankruptcy and regain your financial balance. Still, with the assistance of the Law Offices of Ronald E. Stadtmueller, you’ll find yourself quickly recovering and reestablishing your financial stability in no time – even after a financial downfall.
Ready to achieve that freedom from debt and make a fresh start? Call the Law Offices of Ronald E. Stadtmueller today to schedule your free consultation.