Qualifying for Credit for a Home, Car or Apartment After Bankruptcy

In a separate article we took a look at the importance of long term planning when it came to recovering from bankruptcy in order to qualify for a car or home loan.

In this article, we are going to take a look at some specific time frames so you have an idea of what to expect when it comes to your ability to purchase a car or home (and almost everyone needs credit to do this today!).

Obtaining Credit for a Car

In most cases, you will find that even though your credit score is still fairly low, you can gain credit for a vehicle almost immediately after your bankruptcy is discharged.

In fact, there are companies who specialize in providing loans to people considered high credit risks, and that includes car dealers. All you have to do is some research to find out who and where they are.

Now, just because obtaining this credit is possible does not mean that it is easy. Everything comes with a price, and the price for a successful credit application for a car loan after a bankruptcy is guaranteed to be high interest rates.

Don’t expect to find dealers who offer 0% financing to you; in fact, the credit that you are advanced is likely to come with some stiff interest terms.

This can be pretty hard to swallow, but once again it is important to take the long view.

While you are may pay through the nose in interest (at least initially), every payment you make will go towards rebuilding your credit score. Every time your rating goes higher, you have the chance to get a loan from a source which will charge less interest.

Keep checking around even though you have secured credit; you will eventually be able to secure loans from companies and dealers who offer better interest terms. Take the loan and pay off the higher interest one, and keep doing this until you are back to low interest rates.

Obtaining Credit for a House or Apartment

Obtaining credit for the purchase of a home or an apartment for a person who has declared bankruptcy is a little bit more difficult, simply because houses are a higher risk in terms of price than vehicles.

Even the most flexible (again, read higher interest!) mortgage lenders will want to see two years of clean credit history since your bankruptcy filing was discharged. Default on any payments on anything during this period, or even a late payment, may hurt your chances at getting that loan.

Of course, companies are not the only place to look when it comes to getting credit for a car or home loan after bankruptcy, although for many individuals they may be the only viable ones.

You can also seek to obtain credit from friends or family through an outright or co-signed loan - but remember that defaulting could have lifelong consequences.