Credit and Credit Restoration

Almost everyone asks us the same thing..."what's this going to do to my credit"? The reality is that by the time that someone comes to us for help the harm to their credit has already been done or at least set in motion with late pays and missed payments, repossessions and the like. I always say in reply...."either your credit is already bad or it's good but it's going to be bad real soon...otherwise you wouldn't be here"...I've never been wrong about that. The ironic thing about bankruptcy is that it generally almost always helps your credit. I know that sounds strange but it's true. Think of it this way....let's pretend that I'm a loan officer. I make money by writing loans right...so I dearly want to write a loan for you. However, if you've got late pays, missed payments and a whole bunch of money you already owe someone else...there's no way I can write you I loan.....I lose. However...if you've done a bankruptcy recently that means you can't file another chapter 7 for 8 years. Plus the slate has been wiped clean....and if you've got some income coming in and can afford the payments we're talking about for this proposed loan...then we both win right? You get your loan and I get my commission! The thing is this...bankruptcy is not the "kiss of death" that it once was. It is just another "event" on your credit report that will impact your FICO score. Basically that means it will have something to do with how much interest you are going to pay....or in other words...the price of the money you want to borrow. All that being said...I can't speak for any individual lender or anyone else that extends credit. They all have their own underwriting requirements and ways that they assess creditworthiness to determine whether they will make a loan to someone. But it is a business just like any other...to stay in business they have to make loans...and you will find that money is available. Quite frankly, most of my clients are amazed at all the junk mail they have literally hanging out of their mailboxes not soon after they file their case with offers for new credit cards and auto loans.

Everyone says, pretty much without fail, aaggghhh...I never want another credit card again! Let's face it though...how do you book a hotel room, a flight or rent a car without one? Credit is a tool...it just has to be managed wisely. Be a bad customer...pay your balance off every month in full...it drives them nuts!

Once you have discharged your debts in the bankruptcy case you will want to think about doing what you can to clean up your credit report and raise your FICO score. FICO scores (how you are rated on your credit report) are what new credit is all about. Credit Restoration is something you may want to do about especially if you think you will be in the market for a mortgage sometime in the near future. Credit Restoration is not something we offer at our office. You should know that when we are retained to do a bankruptcy that does not include anything to do with "cleaning up" your credit report. After you've received a discharge in bankruptcy it should be noted on your credit report regarding those debts that were discharged in your case. Credit Restoration takes it to the next level and is a concerted and aggressive method of challenging adverse notations on your credit report to make sure they are either corrected, or if appropriate, removed. You can find many "how to" books on this topic or, as I'd recommend, hire someone who does it full time if you have the funds to spare to pay for their services. We recommend Sunny Nordvik. You can email her at sunny@creditrestoreinc.net and she can tell you about what she does and how she does it if you are interested.