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Will I be able to get a loan or mortgage after bankruptcy?

On Behalf of | Apr 24, 2023 | Firm News

Many people worry that they will never be able to qualify for a loan or a mortgage again after a Florida Chapter 7 or Chapter 13 bankruptcy. However, this is not necessarily true. In fact, there are some steps that you can take to rebuild your credit and improve your chances of getting approved for a loan or a mortgage after bankruptcy.

Your credit score

Bankruptcy is a negative mark on your credit report that can lower your score. However, it is not permanent. A Chapter 7 bankruptcy will stay on your credit report for 10 years, while a Chapter 13 bankruptcy will stay for 7 years. Over time, the impact of bankruptcy on your score will diminish as you add positive information.

Your credit report

Monitor your credit report. You should review your reports carefully and make sure that all the information is up to date. Dispute any errors or inaccuracies. You can receive a free copy of your credit report from each of the major credit bureaus (Equifax, Experian and TransUnion) every 12 months.

Build good credit

Establish a positive payment history and avoid late payments and defaults. One of the most important factors that lenders look at when evaluating your creditworthiness is your payment history.

They want to see that you can pay your bills on time and in full every month. Therefore, you should make sure that you pay all your current obligations, such as rent, utilities, car payments, etc., on time and in full every month. You should also avoid taking on any new debt that you cannot afford.

Apply for a secured credit card or a low-limit unsecured credit card and use it responsibly. A secured credit card is a type of card that requires you to deposit money as collateral before you can use it. The deposit acts as your credit limit and protects the issuer in case you default on your payments.

A low-limit unsecured credit card is a type of card that does not require a deposit but has a very low credit limit (usually less than $500). Both types of cards can help you rebuild your credit if you use them wisely and pay them off in full every month.

Avoid applying for too many cards at once because this can hurt your score too. Remember, rebuilding your credit will take time, but with these steps, you can get another Florida loan and mortgage in the future.

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