Bankruptcy can be the worst item to have on your credit report. No matter what the circumstance that led you to file, it doesn’t make a difference. It shows lenders that you were unable to pay off your debt.
This will stay on your credit report for ten years and it will take some time for you to get back to having a good credit score. It will take some work, but it is possible.
You can still get financed with bad credit or a bankruptcy, from certain lenders. There are specialized loans available for people who have bad credit and it is possible to qualify. When looking to get financed after bankruptcy, keep in mind that you will have a high interest rate upon approval.
Bankruptcy is viewed as a risk by lenders, so the higher interest rate is a reflection upon your credit score and past credit history.
Obviously a bankruptcy will have lowered your credit score, but lenders will also want to take a look at your credit history. The chances of you getting financed after bankruptcy will depend on your history before it was discharged.
The fewer delinquencies you have, that will work in your favor. One mistake people make after bankruptcy is to avoid credit altogether. The problem with that is most likely in the future you will apply for a loan. It won’t look good to lenders if you have a few years of not using credit since filing for bankruptcy, and nothing to show for your current financial status.
Lenders will take a look at your monthly income and you should definitely have enough to cover the monthly loan payment. Typically, if you were applying for a loan if your income was close to the approval amount, you might still get approved.
Yet after a bankruptcy there is little room for leniency. You now will face more requirements and restrictions, from the bankruptcy.
All is not lost. Just remember that you can still get approved after bankruptcy. If you can meet a lender’s requirements, then you will get financed. This will help you to raise your credit score and start to build up good credit.