When lenders see bankruptcy on your credit report does it turn them away from lending to you? What is the best way for me to rebuild my credit? I have started by getting two credit cards and have never been late with a payment, but what else can I do? I would like to purchase a house soon, but I’m afraid to try.
Lenders probably will be reluctant to lend to you, especially if the bankruptcy is recent. In today’s economy, lenders are much less tolerant of risk, and bankruptcy is a strong indicator of lending risk.
You might be able to qualify for a home loan depending on how long ago the bankruptcy occurred and how you have managed your credit since. However, there is a strong likelihood that you will have to pay much higher interest rates and fees to qualify.
It sounds like you are doing the right things in terms of rehabilitating your credit. You’ve established new credit and are paying the bills on time. Continue to do so and keep the balances low. You also need to make sure you are saving enough for a large down payment and will still have savings to cover repairs and emergencies.
It’s difficult, but you have to be patient. You didn’t get into credit trouble and have to declare bankruptcy overnight, and you can’t become a great credit risk overnight. It might take months, or maybe even years, but keep doing the right things, and in time you will restore your strong credit history and be able to qualify for that home loan at good rates.
Thanks for asking.
- The “Ask Experian” team