Having a good credit profile is necessary if one wishes to gain access to credit cards, loans and rental properties — among various other things. The problem is, many Michigan residents have found themselves with less than stellar credit ratings due to debts, the inability to repay their debts and specific actions taken to clear their debts — such as bankruptcy. Because of this, there are those who refuse to file bankruptcy or who will look for companies after the fact that can help them repair their credit, but if they are not careful, they may find themselves worse off.

To be clear, bankruptcy can be a very positive step when one is looking to gain financial freedom. It can, however, stay on one’s credit report for quite some time. Those looking to have their bankruptcy filings removed from their credit profiles will be enticed by companies who promise new credit identities or the ability to remove negative comments or accounts from credit reports.

The problem is, very few credit repair companies are legitimate and actually help their clients take steps to improve their situations. According to the Federal Trade Commission, most companies offering such services are scams. Those who fall victim to these scams will find themselves left with poor credit ratings and out a lot of money.

Michigan residents who are considering bankruptcy but are worried about what that will do to their credit profiles can help themselves by remembering that without seeking debt relief, they are most likely going to suffer from poor credit profiles anyway and it may take longer to repair their credit when significant debt is still in the picture. Bankruptcy can be a positive thing and the first step toward restoring one’s credit. Those who do take this step can then work on staying out of debt and making smart money decisions which will over time improve their credit ratings.