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AFTER BANKRUPTCY: APPLYING FOR CREDIT - Many people who have filed bankruptcy in the past apply for credit the wrong way

They fill out a credit application and hope for the best Best case, they probably end up paying a lot more in interest and finance charges - hundreds or even thousands of dollars more, depending on what theyre buying

Time will be your biggest Allie when trying to re establish credit after bankruptcy BY taking the time to open smaller accounts paying them on time and slowly moving on to larger accounts you will see your score jump But none of this will happen in a matter of days or weeks Have the patience and the plan and your credit will once again be good to perfect even with a bankruptcy in your past!

Remember that credit reports are not always entirely accurate, so it is important that you check it for any errors, particularly if your credit score is in such a precarious position One amendment in your favour could mean the difference in being turned down for a home loan and being accepted

If you have a mortgage, but then declare yourself bankrupt, you can keep your property but may only maintain a certain amount of equity within it The equity levels are known as the homestead exemption and vary from state to state

Many times people believe they cannot get back on their feet after a bankruptcy, but usually it is a clean start This would be a good time to ask your mortgage consultant on what your optios are email me [email protected] for information on how I can help

Having a perfect mortgage history after bankruptcy will help you when applying for credit

That said, in this article we are going to talk about the RIGHT way to apply for credit and loans So what is it? Well there are three steps:

1) Learn how to increase your credit score

2) Know the credit approval process

3) Know how to apply for credit and loans

Now, you want to get all three of these steps right Not just one or two, but all THREE! See if you miss one, or don't do it just right, you can end up paying $100s, $1,000s or $10,000s in additional interest and finance charges, depending on

Here are the three steps in more detail

Step One: Learn how to increase your credit score

Increasing your credit score is a key factor in lowering the interest rate you pay on loans and getting approved for them as well Unfortunately, there are a lot of myths out there that can actually hurt your credit score

There a number of ways to increase your credit score One way is to watch your credit card balances Lenders don't like to see them go above 50% of the available credit limit

For example, if you have a credit limit of $3,000 and you're current balancing owing is $1,800 (60%) that can hurt your credit score In this situation, there are two ways you can fix the problem

First, of course, is to pay the balance down so that it's less than 50% of the credit limit The other way is to get a credit limit increase:

If you can get a credit limit increase to $5,000 that will means you will be at less than 50% of your credit limit ($1,800 balance versus $5,000 credit limit) And you didn't have to pay down the balance by a penny!

Another way to increase your credit score is to add years of positive credit history to your account Most people don't know about this and it's 100% legal But that's another article in itself

The point I am trying to make is that there are a number of strategies you can use to increase your credit score Best of all, many of them can be implemented quickly and easily

Step Two: Know the credit approval process

What do potential lenders look for? Here you need to know the questions to ask For example, do they work with people who have had a bankruptcy in the past? What is the minimum credit score they want to see? These are just the initial questions

There are a number of other questions There are also a number of items that send up red flags if a lender sees them on your credit application - ones that could jeopardize your chances of qualifying for the loan or cost you more money in interest

Another factor when applying for credit and loans is timing You don't want to apply for credit and loans until you've increased your credit score (most people make this mistake)

That brings us to step three

Step 3: Know how to apply for credit and loans

Knowing which lenders to approach and how to negotiate with them is also really important

Apply for a loan or credit with the WRONG lender and you're practically guaranteed to be turned down; or, you end up paying a pile of interest

Then there's there is the negotiation process This especially important when you're buying a car - for example, people will spend a lot of time negotiating the price of the car they're buying and the value of their trade in (if they have one) - and STILL be taken advantage of They don't know how to REALLY negotiate for a car

Think about it How often do you buy a car? If you are like most of people it's probably once every so many years Now, how many times a day do you think a busy car dealership negotiates with buyers? Multiply that by weeks, months and years and you can see that they have slightly more experience

You should now have an idea of the RIGHT way to apply for credit after bankruptcy Though I wasn't able to go into detail on ALL of the strategies you can use to increase your credit score and qualify for credit and loans at more reasonable rates this should at least give you a starting point

For more info contact your mortgage consultant now! [email protected]

After a bankruptcy, it is important that the consumer re-establish his/her credit This is accomplished by opening credit accounts and using them responsibly, avoiding any late payments and high balances

How a borrower has re-established and used credit after a BK is one of the primary considerations of the lender when deciding to approve a home mortgage to a borrower with a past bankruptcy

One way to obtain a credit card if your credit scores won't allow you to qualify is to apply for what they call a secured credit card You can get this from your local bank In this case you would put up $100 dollars as a safeguard to allow you get a credit limit of $100-$200 Only use this for items you would normally buy such as groceries and pay it off every month This will give you one open trade line You may need a few open tradelines to qualify for a mortgage

Even though the credit card is secured by your own funds it is very important that you make timely payments Any late payments after a Bankruptcy will severely limit your options

Refinancing your mortgage after bankruptcy and making timely payments can help you rebuild your credit to potentially higher levels than even before your bankruptcy within as little as two years

Bankruptcy laws are always changing and may or may nor affect your current living situation Always consult a professional regarding the ramifications of filing bankruptcy


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