Bankruptcy and Re-establihing Your Credit Rating
Bankruptcy is the method you have to go through to get started
again. The first and critical item is to improve you credit rating. It
is essential to know how long your bankruptcy will appear on your
credit report. The bankruptcy can be on your credit statement for about
10 years. Although this sounds undesirable, it only takes approximately
eighteen months of on time payments to your creditors to re-establish
your credit. Just keep in mind, it is possible to get good credit
ratings after a bankruptcy.
To help your credit ratings you need to get a job, fulltime or
part-time, it doesn't make a difference. Another way to help your
credit ratings is to get various copies of your credit report. Go over
them in great detail to make sure that they are accurate. You need to
get clear of many of your credit cards. It is recommended to have only
one or two. If you don't have a credit card, attempt to get one from a
local bank or department store. If you can't get a regular card, try to
get a secured card.
At this point you are on your way to re-establishing your credit,
consider these ideas to help you to stay on top. Keep open
communication with your creditors. If they are advised of your current
status they might have helpful ideas about repaying your debt to them.
Creating a budget will help you effectively pay back debts. Another
good idea is to pay off your debts that have the highest interest rates
first. Re-establishing your credit rating is hard work but can be done.
Most women believe that after bankruptcy obtaining a mortgage for a new
home is impossible. This is not necessarily the case as there are many
lenders willing to take a chance on women once the bankruptcy has been
discharged. Nonetheless, there are few steps that need to be taken to
improve the chances of a lender reacting favorably to the applicant s
credit history.
If the person filing for bankruptcy has rewritten any loans such as an
auto loan to keep the vehicle out of bankruptcy, keeping up the
payments on time will demonstrate an improvement on the potential
borrower s part about wanting to pay their bills on time. Additionally,
if any credit cards have been opened since bankruptcy discharge, making
sure they are kept up to date will also help the cause.
One of the main criteria lenders look at for home loans is the
borrower's debt to income ratio. Having recently filed for bankruptcy
the debt should be minimal. Going through the credit report will show
any debts that should no longer be listed and the process of having
them removed begins with a written request to the agencies to do so.
This method can be time consuming and often proof will have to be
provided as to the validity of removing any items from the report.
Even with an appropriate income to debt ratio and a positive approach
to keeping payments up to date may not be enough for some lenders to
issue a mortgage loan. By waiting a year or six months following an
initial rejection may vastly improve the chances of success.
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