Credit repair after filing bankruptcy is not as difficult as it may sound and it is good to know you can learn how to repair credit after bankruptcy. Before you file bankruptcy you will have to go through credit counseling. You’ll learn basic information and learn of resources to help begin building credit after your bankruptcy is finalized.
Winter Park bankruptcy and foreclosure attorneys Eric Lanigan and Roddy Lanigan will explain how to rebuild credit with some basic credit repair overview information and direct clients to a range of credit building resources.
Credit Repair After Bankruptcy
The best way to repair credit is by obtaining a free annual copy of financial history from all three major credit bureaus.
A dispute letter or form can be used to dispute any items that are wrong. The bureaus have 30 days to answer any disputes. Sometimes a negative item can be completely removed from the report. Other times the account in question may be answered as legitimate and will remain.
Bankruptcy mortgage lenders generally ask that their potential customers take at least six months to work on repairing financial history before applying for a home mortgage. This should give ample time to dispute all of the questionable items and hear back from the bureaus. A consumer can add a statement to their financial history on any items that are not handled satisfactorily.
Some of the things that can affect one’s score include:
- Too many inquiries for new credit
- Past due accounts being listed twice
- Too many high interest credit cards that are maxed out
- Too many late payments on existing accounts
Steps to Re-establish Credit After Bankruptcy
After bankruptcy a person would do well to not apply for new credit unless it is to have one account with a low limit that can help to reestablish financial history. Items on financial history that were covered in the bankruptcy should be so noted on the report.
Borrowers should look out for items listed twice, once by the creditor, and once by a collection agency and these should be disputed as being listed twice. Bankruptcy mortgage lenders will look over one’s financial history and may point out things that can make a difference on getting approved for financing.
Bankruptcy mortgage lenders advertise that low credit scores are not a problem and that medical bills on financial history are not a problem. There are financial institutions that have flexibility for those who have difficulty being approved for a home loan particularly after bankruptcy.
Some lenders advertise a person doesn’t have to satisfy judgments against him or her and that the amount of income does not matter. These types of deals can be found online by doing a search. The borrower should make sure these are legitimate and a good deal before signing a contract by doing a lot of careful research. Talk to a financial advisor before making a final decision on whom to go with for funding.