If you have finished filing a Chapter 7 bankruptcy your life will not go completely back to normal immediately. Even though the stress is off your back you have to wait for other things to catch up, such as your credit score and buying a new home. Below is more information about this so you will be ready for what comes ahead.
Increase Your Credit Score
Your bankruptcy will show on your credit report for 10 years. After this time, it disappears and creditors will never know that you ever filed for bankruptcy.
Your credit score will remain what it was when you filed for bankruptcy. This is something that will change, however, if you work hard at it. Before you do anything sit down and create a budget. Be realistic while creating this and put down every penny that you spend from your house payment to gas. This will help you always stay ahead as you will know how much you can afford to spend.
Getting a secured credit card will show creditors that you pay your monthly payments on time. This type of credit card is different than an unsecured card. This is because you put the money on the card and then spend that money. You will have to make monthly payments on what you spend. As you make these payments this money is put back on the card. For example, you can deposit $500 onto the card and this is your credit limit. Over time, you will be approved for an unsecured credit card with a low-interest rate.
Check your credit score and credit reports yearly. You can get a free credit report from the four main credit agencies: Experian, Equifax, TransUnion, and Innovis. Look at the reports to ensure all information is correct.
Purchase a New Home
If you do not currently own your own home, you may think now would be the perfect time to buy one. This is because you have not debt to worry about. Unfortunately, this is not a good idea. Instead, wait a couple of years and spend that time-saving money for a large down payment. You can also save your house payment each month so you can be a few months ahead when you do buy a home.
If you want to get an FHA loan, you will have to wait two years after you file your Chapter 7 bankruptcy before you can even apply and qualify.
A big benefit to waiting is that the interest rate on your loan will be much lower as your credit score will be higher. This will allow you to have much lower monthly payments.
Talk with your bankruptcy attorney about this information. They can give you many more tips on how you can get your life back in order again.
Share8 November 2017
When I started thinking about putting an end to my rental days and investing in a home, I realized that it was going to be a serious stretch from where I was at. I didn't know that much about paying for a house or working with a lender, and I was nervous about making the wrong decision. Fortunately, a friend of mine helped to walk me through the financial aspects of home ownership to get me on the right track. I was able to invest in the perfect house, and my investment paid off with generous returns over the next few years. Check out this blog to find out more about finance and money.
