One Very Useful Online Tool to Help You Manage Your Credit Score

As your Austin Bankruptcy Attorney I generally see damaged credit scores as my clients have fallen into situations that require my services. A Chapter 7 filing won’t help, and it remains on your credit report for ten years. But, normally within a year or less after discharge, your score will be higher than it was before you entered the process. I have written previously on this topic, but today I want to recommend an online service that can take some of the guesswork out of repairing your credit after you are discharged.

That service is Credit Karma. It’s free to use, and it provides you constant tracking of your score from one of the major credit reporting agencies. Among its features is a scorecard that shows you exactly what elements of your overall credit picture are good or bad for you. Establishing a pattern of consistent timely payments on any debts is one obvious good thing. Unused credit limits can be a plus, especially if you can keep your card balances below, say, 50% of their maximum limits. Applying for too many loans and thus getting your credit checked too often is a bad thing; if, for example, you shop a bunch of car dealers when trading vehicles and let them all check your credit to give you precise quotes, you’ll get dinged a bit. (You, that is, not your car!)

Credit Karma has a simulator where you can test the likely outcomes of decisions you are making that affect your credit score. When you register for the service, it collects all your credit data, and it can use that actual information to show you what happens if you open a new credit card account, or pay one off, or let some payments slide during a cash crunch. You might be surprised at what you learn from this simulator; for example, it might behoove you to open up a new credit card and put it in a drawer just to have some additional unused limit.

Credit Karma makes money by giving vendors like card companies the ability to advertise their products on the site in a way that is specifically tailored for you. If you decide to get a new credit card, you’ll see links to apply for cards that are designed specifically for persons in your category. Your odds of an approval may be much higher than if you just choose cards based on Jimmy Fallon or Alec Baldwin TV commercials. And, you want those odds to be high so you don’t waste your credit check bullets unnecessarily.

There are other Internet based credit services; you probably get spam ads for them quite often. Some allow you to buy access to your scores from all three of the major consumer reporting services, and they show you everything on your record. These may be needed if you suspect there’s an error in your credit history, and such errors are not uncommon. If you have been victim of identity theft, by all means you should be looking at the details of your history and getting corrections made.

As your bankruptcy lawyer, my intake process includes a credit check using a professional service. This provides me needed information beyond what you can typically find yourself in online consumer oriented products. It’s the official transcript of all your creditors and their addresses and becomes part of your Chapter 7 filing.

Think of your credit score not as a snapshot of one moment in time but as a process that you need to manage over the years after your discharge. You’ll bounce back faster than you might imagine if you use tools like Credit Karma to help you make the best decisions, and you’ll probably even qualify for better rates as you take on new debts. My direct services for you will have long been complete, but I will always remain hopeful that you are successful in rebuilding from the fresh start a Chapter 7 gives you.