Tip! Instead of opening up a number of credit cards to raise a credit score, find a credit card with a low APR to consolidate onto one credit card. However, caution is advised on people with a short credit life in opening a number of credit cards because it can ultimately lower a person’s credit score, accounts for 15 percent of a person’s credit information.

Following a bankruptcy, your credit score plummets. This makes it difficult to obtain credit on a home mortgage, vehicle loan, credit card, etc. If you are hoping to purchase a home after a bankruptcy, traditional lenders and mortgage companies will not propose the best terms. Moreover, these lenders may refuse to do business with you.

When searching for a mortgage lender, many people contact traditional lenders. However, these lenders primarily concentrate on conventional loans. To obtain a conventional loan you must have a credit score of at least 640. This score fluctuates according to lender. In some cases, lenders require a score of 660. Moreover, you must have a down payment. Standard down payments range from 3% to 20%.

Working with Sub Prime Mortgage Loan Lenders

If you do not fall into this category, you must obtain a mortgage loan from another source. Sub prime and high risks lenders offer loans to people with low credit scores. Low credit scores may be caused by bankruptcies, repossessions, bad credit, etc. Additionally, having excessive debt may also lower your credit score, making you a great candidate for a sub prime mortgage loan.

If purchasing a home after bankruptcy, it is suggested that you delay the process for at least 24 months. This allows time for you to boost your credit rating. This is not a requirement. You may buy a home as soon as your bankruptcy is discharged. Waiting is great for raising your credit score. While you may not qualify for a conventional loan, a credit score increase from 530 to 620 will improve your chances of receiving a reasonable mortgage rate from a sub prime lender.

Read more at Buying a Home after Bankruptcy – How to Buy a Home with a Low Credit Score

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