Your Lake of the Ozarks Mortgage Lender: 5 Tips for Rebuilding Your Credit After Bankruptcy

Friday, July 6, 2018

5 Tips for Rebuilding Your Credit After Bankruptcy

While getting a mortgage at the Lake of the Ozarks after going through bankruptcy is challenging, it's not impossible. Your dream of owning your own home is still possible with a little hard work to build your credit back up. There's no quick fix for improving your credit over night, but following these steps can get you going in the right direction.

1. Open a New Credit Card Account.

Start by opening a secured credit card. They are typically easy to get and are a great way to rebuild your credit. You provide the bank with a deposit and then you are issued a card with a limit equal to that deposit. While the card works just like any other credit card, you charge expenses and then get sent a bill that you pay each month. The key here is to obtain a card from a quality bank and stay away from offers with extreme interest rates.

2. Pay Your Bills On Time.

Most people think about big bills such as rent, car loans and credit cards affecting their credit score, but it's also important to pay the small things on time. Utilities, medical bills, library fines, cell phone plans, gym memberships and traffic tickets can all impact your credit score. If you're regularly late on payments, you could be reported to a collection agency, which will lower your score. Even if you pay off the collection, it will remain on your credit report for up to seven years.

3. Apply for Credit Cautiously.

When you apply for new credit, do so with caution. Any new applications will typically result in a "hard inquiry" on your credit report. While the impact varies from person to person, hard inquiries can negatively affect your credit score. Opening several new lines of credit within a short time frame can indicate that you're having money troubles, and that can negatively affect your credit score.

4. Don't Close Old Accounts.

While it may seem like closing accounts would be a good idea to reduce the amount of debt you can rack up, closing credit accounts reduces the amount of credit you have available, which increases your overall credit utilization rate. This can result in a lower credit score. It's best to keep the account open, but if you are tempted to overspend, you can cut up the card.

5. Monitor Your Credit Closely.

Monitor your credit closely for accurate information. Make sure that all the accounts that were discharged in the bankruptcy are accurately reported as "Discharged in Bankruptcy" as opposed to stating "Charge Off" or any other inaccurate information. Any mistakes found should be immediately reported to the credit reporting agency.

After you've completed the required waiting period for the loan of which you want to apply, and you've rebuilt your credit, talk to a mortgage professional at the Lake of the Ozarks about your home financing options. I'm here to work with you every step of the way through the mortgage process. Give me a call at 573-746-7211 today!

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