Bankruptcy helps consumers get out of overwhelming debt and get better control over their finances. With bankruptcy, consumers have two choices. They enter into a more structured repayment program or start liquidation. Repairing their credit after bankruptcy helps consumers get a fresh start and regain their ability to buy a home.
Review All Three Credit Reports
The consumer starts by reviewing all three of their credit reports. They determine if they have any accounts in good standing after the bankruptcy. Consumers review their credit ratings that appear on each report. Accounts in good standing help to increase credit scores. If the individual doesn’t have any listings other than the bankruptcy, they have the lowest credit score possible.
Pay off Any Debts That Weren’t in the Bankruptcy
Paying off any debts that weren’t settled by the bankruptcy can improve the individual’s credit rating, too. Settlement offers help the consumer pay off the debts faster. After settling negative listings, the consumer can request their removal from the credit history. The credit score improves without negative listings destroying the consumer’s credit history. Consumers can contact Dustin Dimisa for more help with their credit.
Start Establishing Good Credit Listings
Consumers review opportunities to establish good credit listings. It’s important to review the interest rates for each opportunity. The consumer must refrain from overextending themselves and getting back into high debt. Low-interest credit card accounts provide a great choice to get started. Consumers shouldn’t open accounts that have annual fees or unnecessary charges. A store card has a higher interest rate, but it could provide a way to establish credit quickly. Consumers can charge a small amount on it and pay it off before the interest is applied.
Take out Small Loans
Lenders offer small loans as a credit rebuilder option. The consumer sets up an account with the lender, and the payments are deducted from the account. The loans present a way to establish a positive credit listing. Lenders recommend leaving the money in the account and using the funds to repay the loan. This prevents the borrower from not having enough money to make the payments. The borrower gains a positive listing on their credit without losing money.
Apply for a Mortgage after Credit Repairs
Applying for a mortgage after the consumer repairs their credit gives them a preapproval. It shows how much they can borrow to buy a home. Most lenders require at least four years to pass before a consumer attempts to get a mortgage after a bankruptcy. Lenders present information about the mortgages to the consumers. The lowest credit score for any mortgage is around 580. The consumer must review all the eligibility requirements for the mortgages.
Consumers file for bankruptcy to prevent foreclosure and get help through the automatic stay. It prevents the lender from taking the borrower’s home, and the borrower gets a chance to catch up on their payments. If the consumer doesn’t have a mortgage, bankruptcy provides a faster way to pay off debts and settle them. Consumers can get advice from a lender about how to repair their credit after bankruptcy and get a mortgage.