After 25 years of representing individuals in Massachusetts bankruptcy, clients often ask how filing for Chapter 7 bankruptcy in Massachusetts will affect their credit rating. What happens after the Boston Bankruptcy Court issues a Massachusetts bankruptcy discharge? How long will the words Massachusetts bankruptcy stay on your credit report? How long will a Massachusetts foreclosure stay on your credit report? Call Boston bankruptcy attorney Neil Burns for answers to your personal questions, or read on. We have addressed these questions before, but now that the 2010 and early 2011 wave of bankruptcies has subsided, perhaps the perceived stigma, and the hope for personal recovery, has highlighted credit score oriented questions anew. According to "experts," bankruptcy stays on your credit report for up to 10 years. It has an adverse affect on your credit score. However, as time goes on, if you work on improving your score, the fact that the bankruptcy discharge is on your report, has a diminishing effect on your score. According to those same "experts," a foreclosure stays on your credit report for up to seven years. That doesn't mean you can't buy a new home for seven years. If you have no new debt, something for a down payment, and a good "new" credit history, you will likely qualify for some, albeit higher interest, mortgage loans in just a few years after personal bankruptcy. And what about a car? The American dream, and now, for better or worse, the world's dream. The "experts" seem to say that motor vehicle loans are the quickest. The lenders, banks and car companies, lend to almost anyone, anytime. The same is true for leasing a vehicle. The issues is the rate of interest they would charge and the other terms that will be far better for those who did not have to seek bankruptcy protection and discharge their debts. How do you increase your credit score, to work on getting the home, car or simply a credit card? Increasing credit score after bankruptcy was the topic of our blog,http://www.bostonbankruptcylawyerblog.com, on April 25, 2011. That article pointed out that using secured credit cards was an excellent way of working toward a higher credit score. On January 7, 2011, we wrote about using credit unions to secure a credit card because they are more likely to issue one to someone following personal bankruptcy in Massachusetts. It is also helpful to know how FICO calculates your score, so you can effectively work on increasing your score. We have an article on our website that discusses increasing your credit score in Massachusetts but we will outline some of that information here. One, have a bank account. Many folks want to live simply, or can't manage a bank account, but the lenders want to see that you have one, and that you can manage it. Two, get a debit card from your bank, or credit union, and establish responsibility. Three, get a secured credit card through your bank or credit union, as discussed in above referenced blog article. Four, pay all of your bills on time so there will be no negatives reported in your credit report. Five, avoid bad lenders such as those that charge exorbitant rates and the payday loan folks. Six, get a free copy of your FICO credit report and write the agency to correct mistakes. Back up your writing with documents. Seven, live within your means to avoid problems and bad times that may come.
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