The good news of having a bankruptcy record on your credit report does not mean you can't buy a home. Believe me or not but people who have gone through bankruptcy have been able to encouraged themselves to build credit by taking on debt again
But the bad news is that the debt will be closely scrutinized and may come in smaller amounts and high interest rates. This usually happens because when you experience bankruptcy you are now tagged as high-risk borrowers.
But these negative thoughts rather facts should not dishearten those with deprived credit account from investigating their home loan options. The conscientious use of credit is the only way up from a bankruptcy filing.
Bankruptcy can provide liberation to people in terrible financial straits by releasing them from the obligation to repay their debts.
It's a drastic move for anyone because a bankruptcy will stay on a person's credit rating for up to 10 years, effectively acting like a warning flag to anyone considering lending that person money or a line of credit.
In order to mitigate the risk of providing that person a loan, the lender will charge higher interest rates than they normally would. For instance, an auto loan that might ordinarily carry six percent interest could come with an interest rate of eight percent or higher.
But, as time passes and small loans and credit card balances are paid off on time, the bankruptcy filing becomes less and less significant to a lender.
