credit report - Credit after Bankruptcy - Getting Approved for a Mortgage

After a recent or past bankruptcy, most people want to get on the path toward establishing good credit. To accomplish this goal, some choose to purchase a home. While a new home purchase is a good way to rebuild credit and increase your credit score, purchasing a home after a recent bankruptcy may result in higher interest rates and fees. Establishing Credit after Bankruptcy A bankruptcy will remain on your credit report for seven to ten years. During this time, purchasing a new home, car, or obtaining a credit card with a prime interest rate will be tricky. Nonetheless, you need to establish or rebuild your credit. When lenders review your credit application, your score is a key determining factor in whether you are approved. If you have not opened new credit accounts since your bankruptcy, lenders cannot accurately judge your creditworthiness. There are many ways to re-establish credit after a bankruptcy. Getting a department store charge card or a credit card is an option. If you cannot get approved for an unsecured credit card, consider applying for a secured card. Typically, this involves putting a down payment on the card. When Should You Apply for a Home Mortgage Loan? If possible, delay applying for a new home loan for at least two years following your bankruptcy. This will allow you ample time to rebuild your credit and boost your credit score. By doing this, you may qualify for better or comparable interest rates. Several lenders will approve a mortgage loan application one day following a bankruptcy discharge. Unfortunately, the interest rates on these loans are several points higher than current market rates. This rate increase will significantly increase your monthly mortgage payment. How to Get Approved for a Home Loan after Bankruptcy? Fortunately, it is possible to get a home loan following a recent or past bankruptcy. If you are applying for a loan before re-establishing credit, contact at least four sub prime lenders and obtain online quotes. While the rates you receive will be high, you can always refinance in two years for a better rate. If you have established new credit accounts, frequently check your credit report. If you pay your creditors on time and avoid late payments, your credit rating will improve considerably. After two years, begin contacting mortgage lenders. Likewise, you should also obtain several quotes. To speed up the process, apply through a mortgage brokerage site. A single online application will produce multiple quotes from many different lenders. View our recommended Mortgage After Bankruptcy Lenders. Article Source:http://EzineArticles.com/?expert=Carrie_Reeder credit report - Tips On How To Fix Bad Credit Unfortunately, many people find themselves with bad credit. Bad credit is your personal financial history when it comes to things you have purchased on credit. Your credit score is becoming more and more important. It is often looked at for job opportunities, insurance quotes, and even when you go to rent an apartment. It can be a consideration for a variety of things in your life. If you want to buy a home or a new car, a bad credit rating can make this difficult to impossible. Fixing your bad credit is one option that is available to you. However, this can be hard to do on your own. Many companies now offer their services to fix your bad credit. These companies are not magic. They will not make bad credit disappear overnight. They are actually a credit repair type of service. Many people wonder if this kind of service is legal. As a matter of fact, they are completely legal in every state. What they are is a credit expert. They use your rights under the Fair Credit Reporting Act to dispute your credit record. They work with both the credit bureaus and your various creditors to improve your credit score. The way they do this is to have things that are inaccurate, misleading or obsolete removed from your credit report. The upside of this is that you are more likely to be able to receive credit and you can get a better interest rate on the credit you want. It is in your best interest to shop around for the best credit repair service. Check their prices, warranty, how long they have been in business, etc. Many of them offer a warranty, and suggest that you can expect to see results in about 45 days, but definitely not overnight! I general rule of thumb is that someone with 7-10 bad things on their credit report should expect it to take at least six months. Most of these services charge a fee to join, and a monthly fee after that. These fees seem to be fairly reasonable for the services they provide. However, if you use these services to fix your bad credit, you will never be able to maintain it if you don't learn to live within your means. You must control your spending and make a budget and stick to it. It is a good idea to use cash for purchases. If you can't pay cash, don't buy it. Make all your credit payments on time. Nothing improves your credit score like paying bills on time. In the future, plan for only 10% of your monthly income to be used for credit payments. Once you get out of credit hell, you don't want to be going back.