Tag Archives: Credit score

Handling Mistakes on Your Credit Report

Your credit score is important to your financial life. If you are considering financing or re-financing your home, you should thoroughly review your credit report to confirm it is accurate prior to applying for the loan. Mistakes on credit reports are more common that you think and they can cause serious damage to your credit score. In fact, failure to catch an error could affect your ability to obtain a mortgage loan or to be eligible for more advantageous loan terms.

Credit Report | Bankruptcy Attorney Brevard County

Handling a Misreported Short Sale

If you have previously had a short sale on a home, you must confirm that it is properly reported and not listed as a foreclosure. A foreclosure notation on your credit report is extremely damaging to how lenders view your credit-worthiness. Under the law, your creditor must accurately report the circumstances surrounding your default or delinquent account. It is common for a short sale to be noted as the debt being “settled for less than the full balance.” This is an accurate description. However, you must also confirm that the lender does not add the code for a foreclosure to the notation. If you are unable to determine what the codes listed on your credit report mean, it is important to contact the credit reporting agency and have them explain them to you.

Take Immediate Action To Correct Your Credit Report

If you discover there are improper codes on your credit report, you should take immediate action to have it corrected. If you are in the process of applying for new loans, you should put everything on hold until the mistake is corrected. One foreclosure entry could result in you not being eligible for a mortgage loan for three years and up to seven years before you are eligible for a conventional loan. In comparison, a short sale notation only negatively impacts your ability to obtain a conventional loan for two years. As you can see, correcting an improper foreclosure entry or code on your credit report is extremely important.

Correcting Mistakes and Knowing Your Rights

To correct mistakes on your credit report, you should follow the credit reporting bureau’s instructions. Typically, they require you to submit your written objection and any supporting evidence you have that the notation is incorrect. Within 60 days, the creditor that made the report should provide you with a confirmation letter stating that your report has been updated. If your lender fails to make the necessary corrections, it is time to contact us for help. You have rights under the Fair Credit Reporting Act and we will take action to get the issue resolved.

Contact an Attorney at Faro & Crowder, PA

Call us today to schedule your initial bankruptcy or foreclosure defense consultation.

We provide services throughout Central Florida and the Space Coast including Titusville, Palm Bay, Merritt Island, Cocoa, Cocoa Beach, Satellite Beach, West Melbourne, Cape Canaveral and Eau Gallie. Our office is located on Sarno Road in Melbourne, Florida.

Faro & Crowder, PA
Phone: 321-784-8158
Address:
1801 N. Sarno Road, Suite 01
Melbourne, FL 32935
Email: info@farolaw.com

We are a debt relief agency. We help people file for bankruptcy under the bankruptcy code.

Tips for Improving Your Credit Score after Bankruptcy

Credit Score Bankruptcy

If you are like most people who are planning to file for bankruptcy protection, you are already worried about how you can rebuild your credit after your case is over. While a bankruptcy filing will negatively impact your credit score, with time and hard work, you likely will restore your score sooner than you may think.

In order to improve your credit score, it is essential to understand what the credit reporting bureaus look at in determining your score. For example:

  • Payment history. The credit reporting agencies look at your track record of paying your bills on time. It is vital that you review your report each year to verify that it is accurate and that you have any errors corrected or removed immediately.
  • Credit history. In order to build your credit score, you must have active credit. In other words, you may want to keep your credit card accounts open, even if the account is paid and the card is not being used.
  • Post-bankruptcy credit history. If you have filed a Chapter 7 or Chapter 13 bankruptcy, it is important to demonstrate responsible use of credit afterward. This means paying your bills on time and keeping credit cards with only low balances.
  • Debt. After your bankruptcy discharge, you probably will have little debt left. However, it is important to make paying any remaining debt a top priority.
  • Variety of credit. It is normal to have secured and unsecured debt, but the best strategy for keeping your finances under control is to only use credit when necessary.

A knowledgeable lawyer at Faro Crowder, PA, will not only help you obtain the debt relief you need through filing a bankruptcy case, but we will also work with you in creating a plan for rebuilding your credit once you emerge from your case. Call us today to schedule your initial consultation.

How Will Bankruptcy Impact My Credit Score?

If you are considering filing an individual Chapter 7 or Chapter 13 case, it is important to understand all of the pros and cons associated with bankruptcy. One of the primary concerns debtors have is how it will impact their credit score. The answer differs for each person, since no two situations are identical. However, for many individuals, their history of past due payments, repossessions or lawsuits have already negatively impacted their credit score. As a result, the bankruptcy filing does not have a huge effect, especially when compared to the benefit of eliminating debt and getting your finances back on track.

A Chapter 7 and a Chapter 13 filing effect your credit score differently. A Chapter 7 will remain on your credit report for 10 years from the date you file. A Chapter 13 filing remains on your report for only seven years from the time you file. The reason Chapter 13 is removed from your report sooner is because a Chapter 13 debtor repays a portion of what is owed to his/her creditors. Thus, the Chapter 13 debtor’s credit score is not as negatively affected by the filing as a Chapter 7 debtor’s score.

It is important to understand that in both types of cases, the longer you have been out of bankruptcy, the lower the impact of the filing on your credit score. Additionally, while a Chapter 7 notation remains on your credit report longer, it also allows you to eliminate more debt in a quicker amount of time. A typical Chapter 7 case lasts four to six months while a Chapter 13 case lasts three to five years. Thus, a Chapter 7 debtor receives a discharge of debt sooner and can start rebuilding his/her credit quicker.

For help understanding the pros and cons of filing a personal bankruptcy, contact our office for a free initial consultation. Office located in Melbourne, Florida.


Starting Over

Starting Over

Bankruptcy hurts your credit score.

Your credit score is how lender’s determine whether you are going to be a good customer or not, and bankruptcy means many of your creditors did not get what you agreed to pay them.  Many people believe that they are not allowed to borrow money for a certain period of time after they file bankruptcy. You are not allowed to borrow money while you are in Chapter 13, Chapter 12, or Chapter 11 without permission (sometimes from the Court, sometimes from the Trustee).  After your bankruptcy is closed (or with the required permission) you are allowed to borrow.  However, lenders are not required to lend to you.  Some will, but you will pay a premium for being high risk in the form of higher interest rates, and the amount they will be willing to lend to you will be less.  Unfortunately, while you just got out of debilitating debt, the only way to rebuild credit is to borrow money, and pay it back.

For some people, that may mean a credit card that either requires a security deposit or just has a very low credit limit. Charge something every month, pay off the bill in full every month and your credit score goes up every month.  It does seem to be true (the formulas for determining credit scores are closely guarded secrets) that paying in full doesn’t boost your credit as much as paying most of your balance does.  That makes sense because the score is supposed to tell lenders whether you are a good customer, and they make more money if you maintain a balance (as long as you don’t default).  Even though your credit will rise more slowly, the difference is not worth the interest you will pay, let alone the risk that you will get back into a situation where your debt load is more than you can handle.

Other people count on staying current on their secured debts, such as a house or car. If buying a new car is a priority, there are some important things to remember.

First, stay away from huge dealers. A small or mid-sized dealer is probably more willing to work with people with lower credit scores.

Second, lower your expectations. You don’t have to buy the cheapest car on the lot, but you probably won’t qualify for the nicest one, and you don’t need it.  Remember, you want to own a car, not be owned by a car.  When I see people lease cars they could not afford to buy or finance them and trade them in as soon they have enough equity to make a down payment on a new car with the highest payment they can qualify for, I know their quality of life suffers, their stress level is through the roof, and they are likely candidates for a future bankruptcy.  It’s better to own a modest car outright than to rent a luxury car, and if you are leasing or financing without equity, you are renting.

Third, be upfront with the lender. Before the salesperson runs your credit report, tell him or her that you filed bankruptcy (they will find out anyway, and if they ask directly and you deny it you are committing fraud). If you can provide a reasonable explanation for why you filed (such as unemployment) and offer a convincing reason why your financial circumstances have changed (you’re working now), lenders are much more understanding.

You also should wait until after the 341. If you filed Chapter 7, you may need to wait until the discharge. That’s only an extra few months anyway. If you filed Chapter 13, you may need the trustee’s permission to acquire new debt. Make sure the payment fits comfortably inside your current budget.  If you cannot afford to pay your ongoing expenses AND put away some money for a rainy day, it does not fit within your budget.

If you are trying to rebuild your credit, savings is crucial.  If you do not have savings, any gains you make in rebuilding your credit are a broken transmission, layoff, or illness away from being undone.

For a free consultation with attorneys who can help you get a fresh start, contact our office in Melbourne, Florida.

Contact a Brevard County Bankruptcy Attorney at Faro & Crowder, PA

If you are interested in learning more about how a bankruptcy filing will impact your debt, contact Faro Crowder, PA to schedule an appointment. We are located in Melbourne, Florida on Sarno Road and serve residents and businesses of the Space Coast and Brevard County.

Services Areas

We provide services throughout Central Florida including: Melbourne, Titusville, Palm Bay, Merritt Island, Cocoa, Cocoa Beach, Satellite Beach, West Melbourne, Cape Canaveral, Viera and Eau Gallie.

Get In Touch with Faro & Crowder, PA

Faro & Crowder, PA
Phone: 321-784-8158
Address:
1801 N. Sarno Road, Suite 01
Melbourne, FL 32935
Email: info@farolaw.com

The information on this blog or any blog is not intended as, and should not be taken as, legal advice.

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