How to save your credit in bankruptcy

Today, after watching some NFL games, I suddenly became curious about bankruptcy, so I did a quick google search and the first figure I found was astonishing. According to official records, in 2013 there were over 1 million non-business bankruptcy filings. 1 million. 1,000,000. On average, for every 300 people in the US you know, 1 of them filed for personal bankruptcy last year. This figuratively blew my mind.

So the topic for my blog post today was quickly decided.

You know, life happens. Someone in your family falls critically ill and you have to borrow money to pay for medical expenses without being able to pay it back. You lose a job because of the financial crisis and can no longer pay your bills. I offer my condolences to those that have a legitimate reason to file for bankruptcy. The road ahead, credit-wise, is going to be tough. Bankruptcy stays on credit reports for up to 10 years, and this is not the kind of record you want on your credit profile. Lenders that see bankruptcy when reviewing your credit report will not be very likely to extend you credit.

So, if bankruptcy is inevitable, how can you minimize its negative impact on your credit?

Continue reading How to save your credit in bankruptcy

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The must-know graph for credit scores

The chart from FICO, the company that provides the most widely used credit scores, says it all:

ce_scorebreakdown

That is it, folks. To achieve a high FICO credit score, we only need to improve these 5 components. In order of importance, here are the 5 things we should do to increase our FICO scores:

Continue reading The must-know graph for credit scores

What happens to your credit when you get married?

Saving-Your-Marriage-SmallI have a friend who recently got engaged. Last time we hung out, we had a little chat about his future plans. Being a financially savvy and provident guy, he did some research on the impact of marriage on future housing arrangement, and found out that in order to buy a house in the future he will have to have his future wife go through a credit score check. He was under the impression that his credit profile would be merged in some way with his fiance’s when they got married, and thus they would have a common credit score, taken as the lower of their individual scores pre-marriage. Is this true?

Continue reading What happens to your credit when you get married?