Contrary To Popular Belief, You Can Still Get A Mortgage After Filing For Bankruptcy

It has become an accepted belief that you will not be able to qualify for a mortgage after you have filed for financial insolvency shelter. Many people assumed that once you had filed for bankruptcy protection, you have basically ruined your financial standings in the eyes of any commercial lenders out there. Many believe they will not be able to get a credit card, a loan and needless to say, a mortgage for a house. This is the furthest from the truth. Even those people who had previously filed for bankruptcy were eligible to have a credit card, or a home mortgage loan some time after they had filed the petition. You should not become discouraged if you need a home mortgage even if you had filed for bankruptcy in the past. The process to apply for a mortgage becomes harder in this case, but it is absolutely doable.

Just because you had to file for bankruptcy does not mean that you will never be eligible for any type of loan. Some financial institutions favor those people who had filed for bankruptcy than those who continued to struggle financially because of the heavy debt they still carry. You can definitely qualify for a credit card even if you had filed for bankruptcy in the past. I did it, so why can't you. Capital One, one of the largest credit card issuers, extended a unsecured credit card offer to me only 2 months since I had filed for bankruptcy. This unsecured credit card is not meant for me to spend like I used to, but it is a good vehicle for me to rebuild my credit, hence even with the low credit limit of $500, it is perfect for this purpose. Having a low credit limit on the credit card definitely reminds me of what got me into trouble initially. I now know how to live within my means and NOT just charge expenses on the credit card because the limit on the credit card allows me to.

Prior to getting into this financial debacle, you probably never ever considered how your credit is affecting your financial well-being. This is a major mistake which ultimately brought you into the financial insolvency you have experienced. Now if you are looking to "rebuild" your life, you have to be vigilant about your finances. If you ever want to own a house through obtaining a mortgage, you will need to fix a lot of the credit issues relating to your financial health. You will need to rebuild your credit history and bring up your credit score through all possible means.

Having a decent to excellent credit report is vital to your financial health

An accurate credit report is to be desired because it is essentially as important as your social security number. The industry accepted Big 3 credit bureaus which are Trans Union, Experian and Equifax should all have accurate credit reports on you. If you see that something in the credit report is not correct, you want to bring it to the attention of the credit bureaus immediately. It is entirely possible that your credit report is not fully accurate due to the creditors not reporting your specific information on time or accurately. If is of vital importance to fix the mistake(s) in your credit report as soon as possible. You can do this by following the procedure given by the specific credit bureaus to fix your credit report. Once you are able to remove the incorrect information on your credit report, you are one step closer to having this creditor drop from your credit report in 10 years if you have filed for Chapter 7 bankruptcy. If your ultimate goal is to be able to qualify for that home mortgage loan, then you should do everything that you can to have an accurate credit report and clean up any discrepancies.

Why is it important to rebuild your credit history?

One of the factors that can affect your future finances is the state of your credit history. You will want to have a strong credit history leading up to the time you are applying for that loan. If you can show a long history of good credit usage by not having too much debt outstanding and paying debt regularly, it will demonstrate to the future creditors that you are credit trustworthy candidate. If you do not have any credit card, how can you possibly rebuild your credit history over time? Once you have filed for bankruptcy, it is absolutely possible you will be left without a credit card. In that case, you can apply for a secured credit card instead. A secured credit card is one in which you have a prepaid spending limit, and you will never ever be able to spend more than what you have paid for. If you can use a secured credit card carefully by not overspending, and paying off your balance immediately, you will establish a better credit history which will eventually help you in the long run.

Having a decent to excellent credit score is vital to your financial health

Credit score is so important nowadays that I will encourage you to monitor it at least once a year at the minimum. Since credit score is so important nowadays, you will need to know what your scores are, even if it changes from time to time. You should continue doing what you were doing if you see your credit scores rising every time you run a report. If it dips drastically for the quarter, then review what you have done: Did you buy a lot of items and hence tapped into the maximum of your credit limit? Did you apply for too many credit loans, it can be various store credit cards, which signals a habitual over spending pattern that is alarming to the creditors. Try to avoid those activities that can negatively impact your credit score.

You can get a mortgage even if you have filed for bankruptcy protection

Fixing your credit is an essential part of your life after you have filed for bankruptcy protection. It is an absolute necessity if you are looking to buy a house in the future because all financial transactions is dependent on a good credit score and credit history. Once you are able to attain all the credit rebuilding process, you should be considered creditworthy for that mortgage or loan that you are looking for. Do not be despaired if you had to file for bankruptcy. It does not mean that you cannot be qualified for a home mortgage in the future. It just takes some time to go through the credit rebuilding process but it is worth the efforts.