The Truth of Credit

Loan approvals are generally a decision based on credit score which in turn is based on your credit history. It’s obvious to say that a bankruptcy ruins your credit history, but it does not ruin it beyond recovery. The main issue is that bankruptcy not only leaves a negative stain on your credit report but also reduces your income and those assets that could assure a loan as a guarantee for lenders.

However, there are things you can do to boost your potential for getting approved.

For one, make sure your credit report is clean of stains in your recent credit history; check that there is not negative information that should not be there like missed payments or late payments that you canceled on time. If there are, contact the credit agencies with documentation backing up your claim and demand that they remove that information.

If your recent credit history is bad, you will need to wait in order to successfully apply and get approved. Make sure you pay all your bills in time for at least six months and if you can get a credit card to start rebuilding your credit do so but make sure you never miss a payment and pay your balance in full each time.

When applying for a bankruptcy loan, if you can provide collateral, your chances of getting approved will increase considerably. Your home or your car can both be used as security for a secured bankruptcy loan. This will greatly reduce the risk implied for the lender and may convince him to approve your loan. If you can also provide a co-signer with a better credit score than yours, this will also boost your chances and contribute significantly to your bankruptcy loan approval.

The TRUTH is that a bankruptcy on your credit report will scare lenders away unless you can show that it’s been two years since the bankruptcy was dismissed and that you have been able to build an impeccable credit history without stains since.

If you enjoyed this post, make sure you subscribe to my RSS feed!