Rebuilding Your Credit After Bankruptcy

Attempting to get a loan and rebuilding your credit after being discharged from bankruptcy may seem overwhelming at first. However, knowing what to expect and looking at it from the lending institutions perspective can make it less of a challenge.

One of the first things a financial institution will want to know from you is that your liabilities have been discharged. Believe it or not, there are lots of banks who are prepared to grant loans to people who have been in bankruptcy before. Usually, before a loan can be approved by the bank, they will require that a period of at least of 2 years has gone by since the bankruptcy has been discharged . Also in order for your loan to be authorized some banks or lending institutions may request a down payment from you.

The amount of down payment requested by the lending institution will depend not only on your previous credit but also the terms of the loan. This will include the amount of time and the amount of monies borrowed. Due to the current financial crisis that exists today, most lending companies will need between five percent up to twenty percent of the loan amount for you to put forward as your down payment.

However, if you're having problems in getting a down payment together then there are some programs which can help you. These programs assist you with getting your loan even if you don't essentially have enough money to place as a down payment yourself. One of the simplest methods in which this will be done is by getting a Visa or Master Card, though you can find that in the beginning you must make an application for a secured credit card.

Once you get your credit re-established make it a priority to keep up with it. All credit reporting companies will give you one free credit report a year. Take a very close look at these and if you notice any discrepancies regarding your credit, then immediately talk with the credit reporting company and prepare to have these items removed. Knowing this information and what to expect will make the loan application and credit rebuilding process less stressful and manageable.

Paul McParland has been involved in finance and real estate for more than twenty years.

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