In light of the credit crunch and the wave of foreclosures that have swept the country, buying a house after bankruptcy has become a lot more difficult. In most cases, mortgage lenders not offer a home loan for someone who has filed bankruptcy in the last two years. Getting a home loan after that will largely depend on the size of the down payment you can make and whether your income is verifiable. That being said, even then the mortgage loan you will qualify for will likely have high mortgage rates and monthly payment. This being the case, maintaining on time payments and perfect credit history after bankruptcy is extremely important. Even the slightest sign of consistently delinquent payments, overuse of credit, or having too much debt and your eligibility for a mortgage loan will be thrown into question. Unfortunately, the subprime mortgage crisis has made life after bankruptcy even more difficult.
If you have already filed, there is no reason to dwell on the credit impact. Instead, you should start focusing on the ways that you can start improving it. Despite what you may have heard, removing a bankruptcy from your credit is unlikely (unless of course you filed Chapter 7 more than 10 years ago and it should be off your credit report anyway). Bankruptcy is intended to give you a fresh start, but from a credit standpoint, it will take time for you to rebound.
Here are a few tips to improve your credit score after filing for bankruptcy: First, always make on time payments to your creditors. Getting the credit in order to do this may be more difficult; however, getting secured credit cards or gas cards are easy ways to get credit again after declaring. Second, don’t max out your credit lines. This is a simple way for potential mortgage lenders to see if you have a problem abusing credit—if you are using the full line it is a huge warning sign that you may be a big spender. Third, don’t apply for too much credit. In the same light as the above, applying for several credit cards or loans at once is a warning sign you may be abusing your credit. Read the original article >
