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As a Chapter 7 bankruptcy lawyer in Bloomington Illinois can attest, when a person makes the decision to file for bankruptcy, it is usually after they have struggled for quite some time financially in an attempt to make ends meet. This struggle can cause a great deal of stress and worry, so that often, bankruptcy comes as a relief.
A Bloomington IL Chapter 7 bankruptcy lawyer understands that even with the relief that bankruptcy brings, many people worry what the long-term effects the bankruptcy will have on their credit. They wonder if they will be able to qualify for vehicle loans, mortgages, and credit cards.
Rebuilding your credit score after bankruptcy is not as hard as many people think. Being financially responsible by living within your budget and paying your bills on time goes a long way in raising that score.
There are some things to keep in mind, however, that tend to raise red flags with many potential lenders when they look at your credit history. One of those items is having multiple lines of credit open. Shortly after your bankruptcy has been discharged, you will most likely begin receiving credit card offers. It is okay to enroll for one or two of these cards to help re-establish your credit, but do not make the mistake of enrolling for every card that comes your way.
Cash advances on credit cards are another warning that potential lenders do not like to see. It may indicate that the person is having financial difficulties and is paying their expenses with cash advances from credit cards.
Every time you apply for credit, the inquiry shows up on your credit report. A lot of inquiries on a person’s credit can leave lenders feeling skittish about your financial situation and wondering why you are “shopping around” for credit.
Only making the minimum payments on your accounts may be okay with your current creditors, but potential lenders may consider that as a sign you are struggling financially. That is why it can be beneficial to pay off what you charge every month. You will also save on interest rates.
Not only do potential lenders look for these items when evaluating your creditworthiness, but existing creditors monitor customers’ credit scores as well. Any of these activities could also have an adverse effect on your current accounts as well, causing your creditor to decrease credit limits or in some cases, cut them off entirely.
What About Renting an Apartment?
The good news is that, as long as you pay your bills and avoid unnecessary debt, you will be able to rebuild your credit within a few years.
In the interim, however, there are some issues you may have to deal with until your credit score has increased. One of those issues may be renting an apartment. Today, there are landlords that run credit checks on prospective tenants. The theory is that if you don’t pay your bills, you won’t pay your rent.
Not all landlords run credit checks. Many times, the ad for the apartment will say whether or not a credit check is required. Larger complexes or landlords with multiple properties tend to require the running of credit reports. Individual property owners often don’t require the report.
If the landlord at an apartment you want to rent does run a credit report, it does not mean they will not rent to you. When you apply, bring along bank statements, pay stubs, your monthly budget and any other documentation you have that will show that you are financially able to pay the rent. If your credit was good before the circumstances of your bankruptcy, provide the landlord with proof and explain what the situation was that led you to file.
If you have a good rental history, provide the landlord with those references. If you can afford to financially, offer to pay more than the required security deposit. Even better to the landlord, again if you can afford it, maybe an offer to pay several months’ rent upfront.
Contact a Chapter 7 bankruptcy lawyer in Bloomington IL for Help
If you are struggling with overwhelming debt, bankruptcy may be the answer to help you get back on your feet and able to plan for your future. Contact an experienced Chapter 7 bankruptcy lawyer Bloomington IL clients recommend from Pioletti & Pioletti today to find out what your best options may be.
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