As Atlanta Credit Scores Decrease, Bankruptcy Can Offer a Fresh Start

Folks often feel alone when struggling to overcome a bad credit score. But the truth is, they're not.

More Americans than ever are considered high risk borrowers, according to information recently released by FICO, Inc. More than 25 percent of the country now has a credit score of less than 599 - an increase of 2.4 million since the start of the recession. A poor score translates into trouble qualifying for a mortgage, car loan or new credit card - and those who do qualify will likely face much higher rates, making getting out of debt all the more difficult.

Yet raising your credit score might be easier than you think.

Not sure how? Just ask the growing number of consumers who actually achieved a top credit score during the recession. That's right - just as many of us are seeing our scores worsen, some smart consumers have used the downturn to rebound their ratings. Today 18 percent of credit users have a score of 800 or more - up from the historical average of 13 percent.

So how can you follow in their footsteps? Simple: pay down debt. Having too much debt is one of the biggest obstacles to improving your credit rating. When your paycheck is tied up with monthly payments on credit cards and car loans, for instance, you're much more likely to miss bill payments or exceed your credit limit - both major factors in your credit score. Lowering debt, on the other hand, makes it easier to manage your finances - and your responsible financial behavior will be reflected in your rating.

If you're worried you've got too much debt to handle alone, filing for bankruptcy can often provide the jumpstart your credit score needs. Because bankruptcy will appear on your credit report, there's a myth that filing hurts your score. But in fact, it's usually just the opposite. Your score is calculated based on your results, not what it took to get there. And if you began making payments on-time, staying within your limit and generally proving that you can be trusted, your credit score will eventually improve - and so will your overall finances.

Not sure if bankruptcy is right for you? It's fast and easy to find out when you try a free one-on-one debt analysis with an Atlanta bankruptcy attorney. You can trigger your own personal economic recovery today by making the decision to improve your credit - and your financial future.

Post a Comment

Your email is never published nor shared. Required fields are marked *