Excellent credit is not required to buy a home. Of course, a higher rating will qualify homebuyers for a low rate and better loan programs. Still, buying a home after bankruptcy is easy.
Although home loans following a bankruptcy discharge come with high rates, a home purchase is a great way to quickly boost a low credit rating. Here are a few tips on getting a low credit score mortgage loan.
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Here are three “Building Credit After Bankruptcy” strategies you can use to increase your chances of being approved for auto loans, credit cards, and home loans if you have a bankruptcy on your credit report:
Building Credit After Bankruptcy Strategy #1
Apply for credit where you have a high probability of getting approved, and make the payments on time. Sounds simple, but most people go about applying for credit the WRONG way and make it more difficult than it needs to be.
The main purpose of bankruptcy laws is to give people hopelessly overburdened with debt a financial fresh start. Bankruptcy filings are public records. However, under normal circumstances, no one will know about the bankruptcy. Credit Bureaus will maintain a record of the bankruptcy and it will remain on the credit record for 10 years.
The most common reasons for bankruptcy filings are unemployment, large medical expenses; seriously overextended credit; marital problems, and other large unexpected expenses.
When a person is faced with the mounting debts that they cannot pay, they may find that filing bankruptcy is unavoidable. Dealing with bankruptcy is not easy, and you may feel that there will be a permanent stain on your financial record. While this procedure will remain as part of your financial history, if you have the frame of mind that you will be dealing with bankruptcy well, this record does not need to haunt you. There are many who are experienced in dealing with bankruptcy, and have established or continued successful lives after filing.
When dealing with bankruptcy, it is important to make sure you are well-informed of the laws and the type of bankruptcy you are filing. You will need to know if your home or car will be protected or what other assets or yours may be vulnerable in the case. You will also need to ensure that you will not be harassed by creditors during your case, and finding a good bankruptcy lawyer will help you to defend yourself against additional claims.
When a client and their attorney file for bankruptcy it is not automatically presumed that everything listed on the petition is the exact truth. Attorneys generally will not file any claims knowing they are not accurate, but then again, the attorney is relying on the client’s honesty to insure all the appropriate information is available.
In the majority of bankruptcy cases the attorney filing the petition has already gone through the paperwork to determine if any claims being made are inaccurate. Once the case is filed, the trustee will go over all information supplied by the client, looking for inaccuracies or reasons to believe fraud may be involved.