Credit after Bankruptcy

Not all creditors react the same way to a bankruptcy, but your credit will be hurt. This does not mean that you will not be able to obtain credit. A mortgage professional can advise you on what credit you need to get a mortgage after bankruptcy.

It is a good idea to review your credit report after a bankruptcy. Some accounts that were included in your bankruptcy will still show up as active and delinquent which will hinder your scores from improving. You can obtain a mortgage 1 day after a bankruptcy, assuming your credit score is where it needs to be. It is a good idea to get a small credit card during your payoff period.

Many credit card companies will send you applications after your bankruptcy. They know that most or all of your debt has has been eliminated. They also know you can't declare bankruptcy again for several years. If they do approve you for a card the limit will be low and the rate will be high.

Most people are able to get a secured credit card after a bankruptcy. This means that the borrower would put up a certain amount of money ($300 for example)...and they would get a credit card with a $300 limit secured by this deposit - it's a great way to get your credit re-established after a bankruptcy.

When applying for a mortgage with a recent bankruptcy, your post-bankruptcy payment history is closely scrutinized. Lenders want to see that you have developed better spending habits since filing for bankruptcy. If you have numerous late payments since your bankruptcy the lender may deny your loan; if you have a perfect payment history since your bankruptcy the lender will look favorably on this and is more likely to consider your loan for approval.