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.
Also try working with a credit union can allow you to build up your credit, because credit unions are easier to setting up accounts with. Also be sure to pay all your current bills on time, so that you won't be in a similar situation down the road.
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.
After bankruptcy you can take steps to improve your credit. It is important to make timely payments. Even though you have filed bankruptcy, there still are home mortgage programs available for you.
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.
Is there a Mortgage after Bankruptcy? - Is there a Mortgage after Bankruptcy?
More than 1.6 million American families filed for bankruptcy between 2002 and 2003; a rise of nearly 150,000 nationwide. If you have recently declared bankruptcy, you are probably having difficulties getting credit approval, especially for a home loan.
And if you find a lender to work with you, you are unlikely to get a competitive interest rate. Your bankruptcy status stays on your credit bureau file for ten years following the date that you are declared insolvent. While many mortgage companies will not touch any applicants with negative reports on their credit file, there are some lenders out there who specialize in bad credit and bankruptcy home loans.
There is absolutely a mortgage after bankruptcy for you, provided that you avoid making late payments on your mortgage or any other loans or credit cards following the bankrupcty, whether it is a Chapter 13 Bankruptcy or a Chapter 7 Bankruptcy. LAte payments on a mortgage after a bankruptcy can seriosuly hurt your chances of qualifying for a mortgage.
Make sure you have copies of your Bankruptcy discharge papers to present when applying for a New Mortgage.
Even with the latest developments in the Subprime industry, there are still lenders who continue to offer high Loan-To-Value programs to people who have recently declared bankruptcy.
After your bankruptcy you should review a copy of your credit report to make sure all negative accounts that were included in the bankruptcy are correctly reported. Some creditors may not report accounts as listed in bankruptcy and those accounts will still show open and derogatory.
Following a bankruptcy, it's important to begin reestablishing good credit. One option is a secured credit card. With these, you open a depository account with a financial institution and use your own funds as a line of credit. These credit cards are a great tool for helping your credit profile recover from a bankruptcy.
Interestingly, it can sometimes be easier to get a mortgage after a bankruptcy than to get other types of installment loans.
Unless your bankruptcy is very recent, do not hesitate to look for a mortgage. While it may be more difficult to qualify, there are some companies that specialize in mortgages for those who have had credit challenges. You may be pleasantly surprised with the options out there for you. Of course, you will need to spend more time finding the right mortgage broker who can assist you, so it will pay to be patient and persevering.
BANKRUPTCY is bad. FORECLOSURE is worse. - BANKRUPTCY is bad. FORECLOSURE is worse.
Although it is preferable to avoid bankruptcy, it is even better to avoid foreclosure. Foreclosure is the legal process whereby property is repossessed and sold at auction to cover the costs of an unpaid debt. This is usually the result of a homeowner defaulting on mortgage or loan repayments. The most common causes of foreclosure are divorce, loss of employment or a death in the family.
Most lenders have programs available that you can request called financial hardship packages in order to help you get caught back up on your mortgage payments or at least to assist with helping you to try and keep your home versus losing it due to foreclosure. The key to getting help from your lender though is to contact them early or the first chance you get when you know you are going to be late on a mortgage payment and stay in communication with them.
The foreclosure process can be long and costly and is regulated by state law. The most important thing to remember if you are forced to make a mortgage payment late is to contact your lender immediately.
If you have 30% or more equity in your property, you may be eligible to refinance the property to avoid foreclosure, as an alternative to bankruptcy. Contact a specialist at 415-617-5448 or via email at [email protected] for more information and to see if you qualify.