After a bankruptcy is discharged, many lenders will offer you a home loan. In most cases, these lenders do not require new lines of credit or a high credit rating. Buying a home with good or fair credit has its advantages. These individuals likely obtain better mortgage rates and qualify for a range of home loans. Here are a few tips on ways to raise your credit score before applying for a mortgage.
Pay Creditors on Time
The habit you adopt for paying creditors can have a negative or positive effect on your credit report. If bills are regularly paid on time, your score will soar. Yet, paying a bill one day late may decrease your credit score by as much as 10 points.
If possible, pay bills a couple of days before the due date. Waiting until the due date to pay credit card bills will not have a negative effect on your score however, you may gain a few extra points with early payments.
Maintain Low Credit Card Balances
Following a bankruptcy, it is essential to open a new line of credit. This can be in the form of a credit card, gas card, retail store card, etc. If applying for a new credit card, avoid high balances. Ideally, consumers should keep credit cards at approximately 25% of the limit. Keeping a large balance will lower your credit score.
Stay Away from Credit Inquiries
Although credit inquiries are inevitable, especially when trying to re-establish credit, avoid applying for too many credit accounts. Many consumers are unaware of the damaging effects of inquiries. However, one inquiry can lower your credit score by 10 to 12 points. Because credit scores are already low following a bankruptcy, it is very important to keep inquiries to a minimum.
Carefully Monitor Credit Report
When attempting to boost your credit score, regular credit report monitoring is important. Homebuyers hoping to get approved for a prime rate mortgage will need a credit score of at least 680. After a bankruptcy, it will take time to achieve a high credit rating. However, if you take immediate steps to boost your score, it may be possible to get approved for a low rate mortgage within 24 months.
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Frequently Asked Questions
Bathroom renovation ideas?
By: siralexisbest | 03-09-2008
Where can I go to find some ideas for a bathroom renovation project I have coming up?
Can I buy a new home on a FHA loan?
By: Carolyn McClenney | 31-08-2008
Carolyn McClenney
1 answer
I am a first time home buyer and I don't know a lot about buying a home. This is the right time to buy because no one can afford to buy at the present time. I have qualified for a FHA loan and it's been approved for the set amount. Now they asked me if I had any questions...Well no! They have given me a realtor who is looking for me a place but the areas' is not to my liking. I want a four bedroom, two full bathroom house....I don't believe it's impossible to find and I want new appliances in my kitchen...every one that she has shown me has had it in there but the area sucks.....What other questions I need to be asking these people concerning purchasing a house....can I get a brand new house on FHA with low interest and pay back?
Can having bad credit affect whether i can get a new job?
By: HarrisF | 29-08-2008
can having bad credit affect whether i can get a new job?
Settlement Offers-Does this help or hurt your credit score????
By: Nettie | 26-08-2008
Lita...I have heard that it is not wise to accept a settlement offer from a creditor. I have been told that even though the creditor accepts a smaller amount from a consumer and agrees to settle the account as paid in full, it is still damaging to your credit and will show up on your report as a write off and not a settle account. Is this true?
Thanks
Nettie
Landlord needs help
By: l3378rt | 25-08-2008
i am a landlord, and a tenant has not paid rent for two months. she said she would be out by the end of august. may i enter her place on sept 1st to clean it out?
Higher number
By: its me | 24-08-2008
My credit report states that i should obtain a revovilng line of credit t help my score. what would be the best way of obtain that. my credit score is low but not very low.
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