Bankruptcy Does NOT Improve Your Credit Score

Bankruptcy Picture

Last month I talked about an ad I heard on the radio for a car dealership boasting about financing a loan for a woman with a credit score of 518. As you may recall, I said it disgusted me. Well, since then I have seen an ad on TV that makes me even more disgusted.

It’s an ad for an attorney who specializes in bankruptcy. In the commercial, he is actually encouraging people to file for bankruptcy. Now maybe since that’s what he specializes in you can’t blame him for trying to get some business. But it gets worse. In the ad he actually tells people that filing for bankruptcy will improve their credit score. Seriously?

Unfortunately, it’s true. He tells them that filing for bankruptcy clears you of some payments, which means you will have extra money to pay towards other bills, and paying bills improves your credit score. Yes, he actually says that. He even goes so far as to say filing for bankruptcy is the best thing you can do for your credit. Oh, brother.

While it’s true bankruptcy can sometimes clear you of some debt you may owe, and paying your bills will help your credit score, there is still one thing wrong with his philosophy. One MAJOR thing wrong with it. Filing for bankruptcy is the worst thing you can do for your credit. In fact, it destroys your credit. While even a bad debt you never pay will not hurt you after seven years, bankruptcy stays on your credit for TEN tears. So even if you’re paying your bills easier after bankruptcy, it won’t help. Your credit is shot for a decade.

It really angers me that there are so many people in this world trying to take advantage of others who may have been bad with their money. It’s almost like digging yourself into a big hole only to look up and see dozens of people at the top of the hole trying to sell you a new shovel. You can’t dig your way out of a hole with a shovel. Instead, look for someone with a ladder.

As always I invite you to check out my website at http://www.johnfloyd.com.

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