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Handling credit repair after a Chapter 7 filing

For many Americans, the specter of credit card debt is a constant companion. The average family in Kentucky carries a balance of nearly $10,000 in credit debt, which can force some card holders to declare Chapter 7 bankruptcy in order to clear the debt. Thankfully, there are plenty of ways to repair a credit score following a bankruptcy filing.

Payment history is one of the key components of figuring a credit score. Some 35 percent of credit scores are based on whether or not the card holder pays his or her bills on time. Late payments and NSF fees can have a detrimental effect on credit scores, but paying down an existing balance on time can improve them.

Another major component of credit scores is the utilization ratio. This refers to the card holder's balance as compared to their total available credit. Individuals whose balance is within 30 percent of their total available credit can see a negative influence on their credit scores. Those who maintain a 50 percent or less balance to total ratio, however, are viewed as less risky by lenders.

Ultimately, repairing a credit score boils down to choices made by the card holder. For Kentucky residents who have chosen to file for Chapter 7 bankruptcy in order to wipe out credit debt, the road back to a healthy credit score can be considerably smoothed by fostering positive financial habits. The support of a bankruptcy attorney can also help card holders to find the best path back to financial stability for their unique situations.

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