Qualifying For Credit & Loans After Bankruptcy
After filing bankruptcy, it can be difficult to qualify for credit and loans. While much will depend on your specific situation (credit score, income, age of bankruptcy, etc.), it doesn’t have to be overly difficult.
If you plan on applying for credit after filing bankruptcy, increasing your credit score is critical. It can mean the difference between being approved or declined for a loan. It can also be the difference between a lower or higher interest rate. Apply for credit where you have a high probability of getting approved, and make the payments on time. While it sounds simple, most people go about applying for credit the wrong way and make it more difficult than it needs to be. Oh, and focus on one card only.
To help increase your credit score also make sure any inaccurate negative information on your credit reports are corrected and any obsolete negative information is removed. If you see information on your report that is incorrect, file a dispute. Having a copy of your bankruptcy paperwork, including all the schedules and discharge, will be critical when doing so. In most cases you will need to provide copies of these documents for the errors to be removed. Fixing the errors will go a long way in improving your score.
Equally important is knowing how the credit approval process works. What are the lenders criteria? Do they have a minimum credit score criteria? What about income? How much of an impact will your bankruptcy have? Knowing the answers in advance can help you find the lenders that will approve your loan application. Feeling confident in being approved will also limit the number of credit applications you fill out, which in turn will help your credit score. The lower the applications, the better the score.
Qualifying for credit and loans after filing bankruptcy can be difficult and will take time. Go slow though, build up your credit and make sure your credit reports contain no errors. Doing so will improve your chances to qualify for new loans.