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REBUILDING AFTER BANKRUPTCY
You can bounce back after bankruptcy. It's true
that
bankruptcy has a negative effect on your credit and your
credit score, but the effects don't have to be eternal.
Long before the bankruptcy no longer appears as
an entry on
your credit report, you could be qualifying for loans with reasonable
rates and terms. With determination and perseverance you can rebuild
your credit and you could qualify for reasonable rates in a few
years. The following will help recent bankruptcy filers re-gain
their financial strength:
- Pay bills on time. This is the single
best thing bankruptcy filers can do to re-build their credit
rating.
- Acquire and use a secured or unsecured credit
card. Just don't charge any more than you can afford to
pay off each month.
- Read your credit report. Errors are
possible, and keeping tabs on your progress will help you stay
focused on the goal of rebuilding after bankruptcy.
It also means that if you have a recent bankruptcy
on your credit record and are looking to get financing for a home,
there is hope. Believe it or not, those who have gone through
bankruptcy are actually encouraged to find ways to re-build credit
by responsibly taking on debt.
After bankruptcy many lenders typically want you
to wait at least 2 years from the time of the bankruptcy discharge
before they will consider you for a mortgage loan. Understandably,
mortgage companies want some form of reassurance that the borrower
is on a safe and responsible financial track. Buying a home with
bad credit will just put more emphasis on these factors needed
to get a mortgage loan:
- A two-year stretch of on-time bill payments
- A reasonable down payment
- A steady, stable income
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